Glossary · Doing the deal
First Mortgage
In short
This is the primary lien on real estate, giving the holder the highest claim on the property if the borrower defaults. For SBA loans, this is usually held by the lender.
What it means in a deal
If your business acquisition includes commercial real estate, the SBA lender will require a first mortgage on that property. This ensures their security interest is senior to any other claims. Understand this lien's implications for future property use or refinancing.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about First Mortgage
- When is a leasehold mortgage acceptable as collateral for an SBA 7(a) loan?
- Can I use an SBA 7(a) loan to refinance my existing business mortgage?
- Can an SBA 7(a) loan be used to refinance an existing commercial mortgage?
- Can I use funds from a second mortgage on my personal home for my equity injection?
- What if I want to use a second mortgage on my personal residence for equity injection?
- How does a leasehold mortgage on the business property serve as collateral for an SBA 7(a) loan?
Defined by CapBench 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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