A second lien loan is secured by the same assets as a first lien loan but is repaid from them only after the first lien lenders are paid in full. It pays a higher rate for that risk.
What the video says
In private credit, two lenders can hold the same collateral, and one still gets paid first. The one that waits holds a second lien. Both are secured on the same factory and equipment. Say the first lien lender is owed a hundred million. The second lien lender is owed a hundred, too. The company fails. The assets sell for a hundred and fifty million. The first lien is paid a hundred million, in full. The second gets the fifty million left. Half of what it's owed. For that risk, it charges a higher rate. An agreement between the lenders sets who goes first. So why do investors care? Same assets. Very different odds of getting paid. Secured, but second in line.
In the glossary: Senior and subordinated debt
A simple example with round numbers, not advice. Terms vary by fund.
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