Senior Secured Loan
Private Credit glossary · Loan Structures & Instruments
Definition
Debt with first-priority claim on a defined collateral pool; the most senior class of debt in a borrower's capital structure.
Senior Secured Loan in plain English
When a company borrows from several lenders at once, there's a pecking order for who gets repaid if things go wrong. A "senior secured loan" sits at the very top of that order: "senior" means first in line to be paid, and "secured" means it's backed by specific assets the lender can seize if the company defaults. Picture a line at a repayment window where this lender stands at the front AND holds a claim ticket on the company's equipment. Because it's the safest, best-protected kind of debt, it usually carries a lower interest rate than riskier loans below it.
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