Glossary · Doing the deal
In short
To subordinate means to rank a debt or claim below another in terms of payment priority. The subordinated party agrees to be paid after others.
A seller note is often subordinated to the SBA loan, meaning the bank gets paid first if the business defaults. Your equity injection funds might also be required to be free of any liens or subordination agreements that would give another party priority over the SBA. Understand how all debt ranks.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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