Glossary · underwriting

First position

Also called 1st position, senior position, first lien.

In secured lending, the claim that ranks ahead of later filers. In the advance market, shorthand for a business with no other advances currently collecting.

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.

What it means

Two meanings, and they are not the same.

Legal lien priority.Set by the UCC, generally by order of filing or perfection, with exceptions for purchase-money interests and for collateral perfected by control. It determines who gets paid from collateral in an enforcement or a bankruptcy.
Position in the advance market.A count of how many advances are already collecting from the account. A merchant with none is "first position" and gets the best pricing, longest schedules and largest amounts. Each additional position is priced worse, on shorter schedules, for smaller amounts, because the funder is now behind others in the queue for the same daily cash.

The second meaning is the one you will hear on the phone, and it borrows the vocabulary of the first.

Where this one catches people

Position in the advance market is not lien priority and does not behave like it. Collection happens by ACH from an operating account, not by foreclosing on collateral, so practical seniority belongs to whoever debits first and whose debit clears. A funder holding a first-filed UCC-1 whose pull bounces because a third-position funder debited at six in the morning has all the priority and none of the money. Nobody in this queue is really senior; they are just early.

Where you will meet this term

Merchant Cash Advance Working Capital Asset-Based Lending

Read next

Daily debitThe ACH withdrawal a funder takes from a business operating account every banking day until an advance or sho… Financing statement (UCC-1)The public filing that perfects a secured party's interest in a debtor's collateral, giving notice to anyone … Intercreditor agreement (ICA)A contract between two or more lenders to the same borrower setting out who ranks first, who may enforce and … Lien positionThe order in which secured creditors are paid out of the same collateral — decided almost always by who filed… StackingTaking an additional advance or loan while an existing one is outstanding, so two or more fixed debits run ag… SubordinationAn arrangement in which one creditor agrees to rank behind another for payment or for claims on collateral, c…

First position — common questions

What does first position mean?

In secured lending, the claim that ranks ahead of later filers. In the advance market, shorthand for a business with no other advances currently collecting.

Where does first position catch people out?

Position in the advance market is not lien priority and does not behave like it. Collection happens by ACH from an operating account, not by foreclosing on collateral, so practical seniority belongs to whoever debits first and whose debit clears. A funder holding a first-filed UCC-1 whose pull bounces because a third-position funder debited at six in the morning has all the priority and none of the money. Nobody in this queue is really senior; they are just early.

Is first position the same as an interest rate?

First position is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.

Which products does first position apply to?

Merchant Cash Advance, Working Capital, Asset-Based Lending.

Is there a worked example of first position?

Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.

What else should I read alongside first position?

Daily debit, Financing statement, Intercreditor agreement, Lien position, Stacking.

Has this definition been checked?

Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.

Is this legal advice?

No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.

Can I suggest a term?

Yes — [email protected]. The glossary grows from what people are actually shown in contracts.