Is Loan Asssumable?

 

Our documents cover the Borrower entity at the top level, and if that entity is unchanged, there is nothing in the loan documents to modify. The Lender would handle for example a  buyout and loan continuation administratively as the lender under the transfer provisions in Section E of the Loan Agreement: a change in the LLC's membership interest is a Transfer, and a Transfer the Lender consents to is not an Event of Default. Lender reviews and consents under its existing control at its determination and discretion, on whatever conditions the Lender set for the owner(s). Any non-compliance would be an Event of Default to encourage the Borrower to cure the situation or offer a path for the Lender to proceed at the Lender’s determination.

 

As such the one-time assumption option not being selected does not change that. Every Loan Agreement carries these transfer provisions and the lender-consent carve-out regardless of that setting, so you can consent case by case. The inclusion of a one-time assumption or a Pre-Approved Transfer only outlines specific scenarios and conditions for which the Lender would not unreasonably withhold or delay its consent.

 

One distinction worth flagging: if the ownership is instead moving into a new entity, for example a new LLC taking title with a grant deed transferring the collateral, that would be an assumption rather than an internal ownership change, and that one GoDocs can document through our ModDocs product.