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Definition
Subordinated debt is borrowing whose repayment is contractually ranked below that of other (senior) creditors, so it's only repaid once the senior debt is cleared. A director's own loan to the company is frequently subordinated to a bank facility.
In plain terms
It's debt that agrees to wait its turn. By putting their own loan behind the bank's, a director signals confidence and makes the company easier to lend to.
Why it matters for your company
Subordinating a director's loan can unlock or improve external funding by strengthening the lender's position. See director's loan vs business loan.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.