Glossary · The loan itself
Required Lien Position
In short
This refers to the priority the SBA lender must have on the business's assets as collateral. A first lien position means the SBA lender gets paid first from those assets if the business defaults.
What it means in a deal
For an SBA 7(a) loan, the lender almost always requires a first lien position on all business assets. This protects the loan. As a buyer, ensure all prior liens are cleared at closing, so your SBA lender can secure their required 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 Required Lien Position
- What is the required lien position on collateral for a 7(a) loan, especially when other lenders are involved?
- Is a first lien position always required on all business assets taken as collateral for an SBA 7(a) loan?
- What is the SBA's general requirement for lien position on business collateral?
- When can a second lien position be acceptable for specific assets on a 7(a) loan?
- What are the SBA's requirements for obtaining a first lien position on all principal business assets?
- Does the SBA always require a first lien position on all business assets for an acquisition 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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