A senior debt provider, also known as a senior lender or primary lender, is a lender that provides a loan or financing to a borrower with the first priority claim on the borrower’s assets in the event of default or bankruptcy. In other words, senior debt providers have a higher priority in the repayment of their loan compared to other lenders, known as subordinated or junior lenders.
In the context of commercial property transactions, a senior debt provider refers to a lender that provides financing for the purchase of a commercial property with a first charge on the property in case of default. A senior debt provider is typically a bank or other financial institution that provides the primary financing for the purchase, such as a commercial mortgage or semi-commercial mortgage.
As they hold the first charge, in case of foreclosure or repossession, the senior debt provider will be the first to be repaid.
