# Subordination

A creditor's agreement to be paid after another lender is paid.

Your bank will not fund until everyone else agrees to be paid second, so the seller's willingness to sign is a financing condition wearing the clothes of a courtesy. Read what the document actually restricts rather than assuming: the ordinary version stops the seller accelerating, suing, or taking collateral while the bank is owed anything, and the SBA's [full standby](https://searchspheresource.com/glossary/full-standby) version stops the payments themselves.

In numbers: On a $4M deal funded with a $3.2M bank loan and a $400,000 [seller note](https://searchspheresource.com/glossary/seller-note), subordination is what keeps the seller from collecting ahead of the bank after a missed payment, and full standby holds those note payments for the loan's first 24 months.

Source: https://searchspheresource.com/glossary/subordination
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.

Site index for machines: https://searchspheresource.com/llms.txt