Q: What are the advantages of being represented by counsel in a loan transaction?
A: The lending process can be very complicated and difficult to navigate, whether you are the lender or the borrower. Having counsel draft, analyze, review and revise loan documents enhances not only the quality of the underlying documents, but ensures that the deal between the borrower and lender (whether an individual person or large commercial bank) is properly and accurately described. Form loan documents that haven't been negotiated or reviewed by counsel may leave important questions unanswered such as: Is there a penalty if I want to prepay my loan? Does lender need to consent if I sell my business or incur additional debt? Can a corporate borrower transfer all or most of its stock without prior lender approval? What property specifically is covered by this loan? It's better to ask these questions before the loan is finalized, that way all parties involved are aware of the exact terms of the loan.
Cora Verge an attorney at the law firm of Lukins & Annis, where her practice includes Business & Corporate, Real Estate, and Marijuana Law.
Published in the November 3, 2016 issue of the Spokane Journal of Business .