Debt Financing
The seams
Where the loan and the LLC collide: the two-discipline problems no single adviser is paid to catch, because the banker and the entity lawyer never read each other's document.
The loan protects the lender. The operating agreement protects you. They are drafted by different people, in different bodies of law, and neither reads the other. You are the only party who signs both, which makes you the only one who ever sees them collide. This section is about the collisions, the places where a clause that is correct in the loan quietly undoes a protection that is correct in the LLC.
The damage in a financed deal rarely lives inside either document. It lives in the seam between them, where no single adviser is looking.
These are the two-discipline problems. Deeding a property into an LLC and tripping the loan’s due-on-sale clause. The lender’s demand to opt your membership interest into a part of the commercial code that dismantles your charging-order protection. Where the lender files to perfect, decided by where the LLC was organized, not where the property sits. Loan covenants that outrank the operating agreement you negotiated. And the single-purpose, bankruptcy-remote entity the lender makes your LLC become. Each names the rule on both sides and lands on the move that keeps the two documents from cutting against each other.
The six pages are below, in the order the collisions tend to arrive in a deal.