Common in advance agreements and recorded via a UCC-1 with a broad collateral description. Its practical effect is that a subsequent funder inherits a weaker position, which is part of why later positions price higher.
Related terms
UCC-1 financing statement
A public notice filed with the secretary of state recording a secured party’s claim against a business’s assets.
Position
An individual outstanding advance against a merchant, counted in order — first position, second position, and so on.
Collateral
Assets a secured party can claim if the obligation is not met.
First position
The earliest outstanding advance against a merchant, with priority over any that follow.