Which funding products does this apply to?

Merchant Cash Advance, Working Capital, Term Loan, SBA Loan, Equipment Financing, Asset-Based Lending. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.

Are the figures here quotes?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What a particular lender charges is on that lender's page, where it publishes it at all.

The Find Me Funders research desk. Some drafting is AI-assisted, and every page that is says so at the top, including whether a person has checked its claims yet.

How do I know a figure here is right?

Where a page carries the green notice, its claims were checked against the sources listed at the end and a reviewer is named. Where it carries the amber one, nobody has verified it yet and you should confirm anything you plan to act on.

Are the examples real deals?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What any particular lender charges is on that lender's page, where it publishes it.

Why do you never say what a typical rate is?

Because we cannot source it. A market average assembled from lenders who do not publish prices is a guess with a decimal point on it. Where a lender publishes a figure, we show that figure and say where it came from.

Is this financial or legal advice?

No. It is general information about how these products work. Outcomes depend on your contract and your state, and a lawyer or accountant licensed where you are is the person to ask about your situation.

Can I reuse this content?

Quote a paragraph with a link back. Do not republish whole articles.

Subordination and intercreditor agreements in plain terms

One of these changes who gets paid first out of collateral. The other changes whether you may pay someone at all. They are routinely confused.

By Find Me Funders research desk Updated 14 September 2026 1038 words 5 min read

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

Two different things get called subordination, and the difference decides whether you can keep making payments to a creditor while a senior lender is unhappy.

Lien subordinationchanges priority in the collateral. If the assets are sold, the senior lien is satisfied first and the junior lien takes what is left. It says nothing about your regular payments.

Debt or payment subordinationchanges whether the junior creditor may be paid at all. It can stop you paying a junior creditor even when you have the cash and the junior creditor is owed the money.

A document titled subordination agreement may do one, the other, or both. A document titled intercreditor agreement is usually a longer instrument doing both plus a set of rules about who may do what, and when.

The clauses that matter, and what each one does

The priority clause.States which lien ranks first, and in what collateral. Read the collateral description carefully: subordination can be limited to specific assets. A junior creditor subordinated in equipment may still be senior in receivables.

The permitted payments clause.This is the one that affects you daily. It says which payments to the junior creditor are allowed in the ordinary course — usually regular scheduled payments, and usually not prepayments, not accelerated amounts and not payments while a senior default exists. If your junior obligation is a daily-remittance product, ask specifically whether daily remittances count as regular scheduled payments. They do not always, and a clause drafted for monthly instalments can be read to prohibit the thing you do every morning.

The blockage notice.A mechanism by which the senior creditor can tell you and the junior creditor to stop payments, typically on a senior default. Look for three numbers: how long a blockage lasts, how many blockages are allowed in a twelve-month period, and how much notice is required. A blockage right with no time limit is a very different clause from one capped at 180 days.

The standstill.Restricts what the junior creditor may do — sue, accelerate, sweep an account, enforce against collateral — for a stated period after a default. Junior creditors negotiate hard on the length. From your side, a longer standstill means more time to fix a problem before two creditors are enforcing at once.

The turnover provision.If the junior creditor receives money it was not entitled to, it must hand it to the senior creditor. This is what makes the rest enforceable and it is why a junior creditor who quietly keeps debiting during a blockage has a problem, not just you.

The amendment restriction.Limits what you and the junior creditor may change without senior consent — commonly the principal amount, the rate, the payment dates and the maturity. A restructure of the junior debt may require the senior lender's signature. Find that out before you negotiate the restructure, not after.

The insolvency provisions.Allocate voting and distribution rights if the business files. These are heavily negotiated between the creditors and you have little input, but you should know they exist because they shape how each creditor behaves under stress.

What it costs you to get one signed

A subordination is a transfer of value from the junior creditor to the senior one, so the junior creditor usually wants paying for it.

Illustrative only —a senior lender requires subordination from a funder holding $22,600 of remaining obligation. The funder agrees, conditional on a $5,000 paydown at closing and a $750 documentation fee, with the remaining $17,600 continuing on schedule.

Cash required at closing beyond the payoffs already planned: $5,750.00
Reduction in the junior obligation: $5,000.00
Net cost of the consent: $750.00
Remaining junior balance: $17,600.00

Compare that against the alternative of clearing the junior position outright at $22,600. The subordination route needs $5,750 at closing instead of $22,600 — a $16,850 difference in day-one cash — at the price of keeping a junior creditor and a set of restrictions. Whether that is the right trade depends entirely on whether you have $22,600.

How to read one before you sign

Find the permitted payments clause first. Everything else is secondary to whether you may keep paying.
Map the collateral. Which assets, and does the description match your actual security agreement?
Count the blockage days. Multiply by your junior payment amount to see the maximum arrears a blockage can create.
Read the standstill against your own timeline. How long could you operate with a senior default unresolved?
Check the amendment restriction against your likely next move. If you may need to restructure the junior debt within a year, a tight restriction is expensive.
Check who signs. These are agreements between creditors; you usually sign an acknowledgement rather than being a principal party. Your acknowledgement often contains its own covenants — read those separately.
Check the termination. When does the agreement end? Usually on payment in full of the senior debt. Confirm the junior creditor's lien position restores automatically.

Where these show up in practice

Bank and SBA lenders ask for subordination as a condition of closing when a short-term position exists. Equipment lenders take a purchase money security interest that outranks an existing blanket lien in that equipment, and often want the blanket holder to acknowledge it. Landlords and warehouse operators sign related but distinct documents — a landlord waiver is not subordination, it is a consent to remove collateral.

What to do

Ask for the draft early. These take longer to negotiate than anyone plans for, and a closing held up by an unsigned subordination costs per-diem on every payoff letter in the file. Ask the junior creditor at the start what they will require to sign, in dollars, so the number is in your net funding table from the beginning. And read the permitted payments clause out loud to whoever runs your bank account, because they are the one who will be violating it by habit.

What a given clause does depends on its exact wording and on the governing law the agreement selects. This is a description of standard mechanics, not legal advice, and these documents are worth a lawyer's hour.

Where this applies