Glossary · People and paperwork
In short
A lender or individual whose claim to repayment is ranked below other creditors. For SBA loans, this often applies to sellers who provide a seller note.
If the seller provides a seller note as part of your equity injection, the SBA will require them to be a subordinated creditor. This means the SBA lender gets paid first in case of default. The seller's note will have a standby agreement, potentially full or partial, dictating payment terms.
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.
Know what you'll need before you apply
Tell us about the deal and who's buying — we'll flag the guaranty, eligibility, and paperwork issues that slow SBA approval before they cost you time.
Free · No documents · Usually same-day