Glossary · The loan itself
Senior lien
In short
A claim on an asset that takes priority over all other claims in case of default or liquidation. The holder of a senior lien gets paid first from the sale of the collateral.
What it means in a deal
SBA 7(a) lenders typically require a first lien position (senior lien) on all business assets and any owner-occupied real estate collateral. This means the SBA lender has the primary claim if the business defaults. Understand what collateral secures your loan and the lien priority.
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 Senior lien
- What are the specific requirements for a lender to obtain a valid first lien position on UCC collateral when prior liens exist?
- When must a lender take a lien on specific equipment for collateral, beyond a blanket lien?
- What are the specific lien priority requirements for lenders on both business and personal collateral securing a 7(a) loan, particularly when junior liens exist?
- Is a separate lien required on each piece of equipment if a blanket lien is already in place?
- Does the SBA take a lien on my personal home as collateral?
- Is a blanket lien on all business assets a standard SBA requirement?
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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