Glossary · The loan itself
Security position
In short
This refers to the lender's place in line to get paid back if the business defaults and assets are sold. A better security position means the lender gets paid before others.
What it means in a deal
For an SBA 7(a) loan, the lender almost always wants a "first lien" security position on all business assets. This means they are first in line, ahead of other creditors, if the business goes under. Always confirm the lender's lien priority in the loan documents.
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 Security position
- What is the SBA's general requirement for lien position on business collateral?
- How does the SBA require lenders to perfect security interests on accounts receivable and inventory?
- How does a lender perfect a security interest in intellectual property for a 7(a) loan?
- What is the SBA's requirement for a buyer's post-closing working capital position?
- If the seller requires a security interest, how does it affect the standby status of their note?
- Do I have to put up my personal house as security for an SBA 7(a) 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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