Glossary · People and paperwork
Intercreditor Agreement
In short
A contract between two or more creditors outlining their respective rights and priorities concerning a common borrower and shared collateral. It determines who gets paid first if the business defaults.
What it means in a deal
In an SBA 7(a) deal, an intercreditor agreement is crucial if there's a seller note or other subordinated debt alongside the SBA loan. It formally establishes the SBA lender's first lien position and the terms under which other creditors can be repaid, often involving standby provisions.
Official sources
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.
Related terms
Common questions about Intercreditor Agreement
- When is an intercreditor agreement required between a 7(a) lender and another secured creditor for an SBA loan?
- How does life insurance effectively fund a business buy-sell agreement?
- How does the purchase agreement structure affect an SBA partner buyout?
- How does an operating agreement impact an SBA partner buyout loan?
- What happens if the seller terminates the purchase agreement mid-process?
- What are the specific conditions for an acceptable full standby agreement?
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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