# Intercreditor agreement

The agreement between two lenders over who gets paid first.

With a bank loan and a [seller note](https://searchspheresource.com/glossary/seller-note) in the same deal, the two lenders have to write down what the junior one may do when payments get tight, and the answer is usually close to nothing. It governs whether the seller note can be paid at all during a standby period, whether the seller may accelerate or sue, and who reaches the collateral first. Sellers regularly meet it for the first time a week before closing, which is the worst moment to discover that the note they negotiated cannot be enforced for the life of the bank loan.

In numbers: A $250k seller note behind a $1.5M SBA loan on [full standby](https://searchspheresource.com/glossary/full-standby) pays the seller nothing, principal or interest, for the life of the loan, whatever the note itself says.

Source: https://searchspheresource.com/glossary/intercreditor-agreement
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

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