I've been speaking with many top SBA lenders over the last 6 months, and even consulted an SBA bankruptcy attorney to find out the impact of a lender taking a lien on my primary residence to secure a loan. All of them said basically the same thing - that it's basically not optional (if you have more than 25% equity in your house) and while it's very very rare - they can take your house if the business were to fail. Ok. Made sense. Until today.

Today, a different SBA lender told me that when they put a lien on a house, that they have to take 2nd position to the mortgage lender on the home (if there is a mortgage). And that because they are in 2nd position, they can't force a liquidation of the house - that only the lender in the 1st position can (the mortgage lender) and that if you're paying your mortgage on time, that they would never do that. That also makes total sense and seems obvious in hindsight. So in reality, there is no 'teeth' behind this 2nd lien on a home. And if you also have a HELOC, then they are in THIRD position, with 2 banks in front of them that have zero-interest in making you liquidate your home.

So which is it?? If the second scenario is true, then perhaps the only downside of this 3rd lien (in my case) is that you need to have SBA-bank approval if you sell your house to move, etc. But that's certainly less of a concern than them deciding to sell my house. Maybe I misunderstood. Searchfunder! Help me make it make sense!!