DEFINITION of 'Primed'

The act of granting a new lender a higher claims priority over a current secured debt holder. A lender is considered primed when they are surpassed on the priority ladder for a borrower's assets.


A lender may agree to being primed if they feel the new loan can prevent bankruptcy in the company or help increase its financial stability. For example, a company files bankruptcy, but is operating as a debtor in possession. If the firm is offered DIP financing, where a new lender gives the ailing company additional funding, its current lenders would usually be primed to the new lender. The current debt holders might agree to being primed if they believe the new funds will allow the company to recover. In this case, the company would have a better chance at paying off all of its debts in the future.

  1. Senior Issue

    An issue of bonds, preferred stock or other securities that represents ...
  2. Subordinate Financing

    Debt financing that is ranked behind that held by secured lenders ...
  3. Borrowing Base

    The amount of money a lender will loan to a company based on ...
  4. Good Faith Estimate

    An estimate of the fees due at closing for a mortgage loan that ...
  5. Subordination Agreement

    Subordination agreement is a legal agreement which establishes ...
  6. Subprime Lender

    A type of lender that specializes in lending to borrowers with ...
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