Glossary · Doing the deal
Second mortgage
In short
This is a loan secured by real estate that is subordinate to a first mortgage, meaning the first lender gets paid back first. Buyers care because it indicates another lender has a prior claim on the property, affecting your equity and risk.
What it means in a deal
In some SBA deals, if the existing real estate collateral isn't enough, or if the seller is carrying a note on the property, a second mortgage might be used. Understand its terms and how it affects your equity and risk. The SBA will typically want a first lien on business assets, potentially including real estate.
Related terms
Common questions about Second 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?
- Is it possible to use a second mortgage on my personal residence as an equity injection for a $1.5 million business acquisition?
- 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?
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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