What is a Second Position Lien (Second Lien)?

A security interest that ranks behind the first-position lien. The second-position lender is paid only after the first-position lender is paid in full from collateral proceeds.

For example, a lender gives a second-position loan against a piece of equipment that already has a first lien; if sold, the second lender is paid only after the first lender is fully repaid.

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