LENDING GLOSSARY
First Lien
First-Priority Lien
A security interest with priority over junior liens in the same collateral.
What does First Lien mean?
A security interest with priority over junior liens in the same collateral. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
First Lien in context
A bank's mortgage may hold first-lien position on a commercial building.
Why it matters in financing
First Lien can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related lending terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.