Junior Debt
Another term for subordinated debt, ranking behind senior debt in priority of repayment if a business can't cover all of its obligations.
Junior debt holders are paid only after senior debt is fully satisfied, which is why junior debt typically carries a higher rate to compensate lenders for standing further back in the repayment line.
A business layering multiple types of financing needs to understand where each piece sits in this priority order, since it directly affects both cost and risk across the full capital structure.
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