LENDING GLOSSARY
Second Lien
Second-Priority Lien
A lien subordinate to a first-priority lien.
What does Second Lien mean?
A lien subordinate to a first-priority lien. 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.
Second Lien in context
A second lender may secure a smaller loan behind the existing first mortgage.
Why it matters in financing
Second 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.