Glossary · The loan itself
Lien priority
In short
Lien priority determines which creditor has the first claim to collateral if a business defaults, based on the order in which liens were perfected. Your SBA lender will require the highest priority, a "first lien," on your business assets.
What it means in a deal
Establishing lien priority is crucial for lenders to protect their investment. Generally, the first to perfect a lien has the highest priority. Your lender will perform a lien search to confirm there are no existing liens that would take precedence over their first lien position.
Official sources
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 Lien priority
- What are the specific lien priority requirements for lenders on both business and personal collateral securing a 7(a) loan, particularly when junior liens exist?
- When must a lender take a lien on specific equipment for collateral, beyond a blanket lien?
- Is a separate lien required on each piece of equipment if a blanket lien is already in place?
- Does the SBA take a lien on my personal home as collateral?
- Is a blanket lien on all business assets a standard SBA requirement?
- What is the SBA's general requirement for lien position on business collateral?
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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