Glossary · People and paperwork
Primary lienholder(First lien)
In short
The party holding the first claim on an asset if a debt isn't paid, giving them priority over other creditors. As a buyer, you need to know who has first claim on the business's assets, especially if you're using an SBA loan.
What it means in a deal
In an SBA 7(a) loan, the SBA lender almost always requires a first lien position on the business's assets. This means they are the primary lienholder. You'll need to ensure all existing liens are cleared at closing so your lender can take this position.
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 Primary lienholder
- What is the primary purpose of SBA Form 1919 for eligibility?
- What is the primary purpose of the Universal Purchase Package (UPP)?
- What is the primary purpose of SBA Form 1919, 'Borrower Information Form'?
- What is the primary goal of the SBA 7(a) loan program?
- What are the primary fees charged on an SBA 7(a) loan?
- What if the primary business assets are specialized machinery with limited resale value?
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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