Pledges

You can pledge assets including LLC membership or corp. share interests to secure advances made; that allows the lender better terms and thus a more attractive rate potentially. Be careful that the pledges are as limited as possible.

On the downside, they can freeze ownership interests to limit voting and compensation rights, limit expansion or contraction, dictate lending and personnel arrangements, change sales and purchase terms, change site arrangements, and generally govern control of a business.

But it can be used by an insider to protect his investment in a business when there are liquidity issues.

Let us show you how to use and/or protect against these kinds of legal issues. Contact our trusted and experienced Pennsylvania business attorney to schedule your consultation.