Glossary · Doing the deal
Seller's lien
In short
This is a legal claim by the seller on the assets of the business you're buying, typically securing a seller note. It gives the seller the right to repossess assets if you default on that note.
What it means in a deal
If you're using a seller note to finance part of the deal, the seller will likely take a lien on the business assets. The SBA requires this lien to be subordinated to the SBA lender's lien. Ensure the subordination agreement is properly drafted and recorded to protect your senior lender.
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 Seller's lien
- What is the SBA's general requirement for lien position on business collateral?
- What if the seller wants to retain a subordinate lien on some business assets after the sale?
- Can a seller note be used to finance the entire seller's equity contribution to the buyer's business?
- What are the SBA's requirements for obtaining an enforceable first lien position on a 7(a) loan's business assets?
- What are the lien subordination requirements for a seller note on full standby in a 7(a) acquisition?
- What are the SBA's requirements for obtaining a first lien position on all principal business assets?
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.
Line up financing while you're under LOI
Tell us the business, the price, and your timeline — we'll match you with lenders who close deals like yours and flag anything that stalls the process.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.