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Irwin Law
Irwin Law, Attorney
Category: Business Law
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Experience:  30+ yrs. representing small business, real estate, probate
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Do I need to register with the state or obtain some type of

Customer Question

Do I need to register with the state or obtain some type of state license to originate and service commercial loans not secured by a mortgage or deed of trust? The loans are secured by a pledge of partnership interest and are non-recourse to any individual except for standard 'bad boy' carve-outs. We will operate nataionally with not particular geographic concentration. Approximately 20-30 loans/year at an average of $750,000. These are not hard money loans so usery is not an issue.

Specifically, we monetize excess cash flow (net of the senior lender) on single-tenant, net leased properties like drug stors, bank branches, mass murchandisers, auto parts retailers, etc. We do not file a lien on the property.
Submitted: 1 year ago.
Category: Business Law
Expert:  Attorney2020 replied 1 year ago.

Attorney2020 :

Yes. You will need to comply with the lender license laws for each state that you intend to do business is otherwise you could be in for a rude awakening looking into the future. There are lender license laws in each state and they are pretty simple to comply with.

Attorney2020 :

I hope this helps.



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Customer: This doesn't tell me anything I hadn't told you. Are you aware of expeditions for obtaining commercial mending licenses? It would appear the generally speaking licenses are not required by most states.
Expert:  Irwin Law replied 1 year ago.
Hello I am another expert here. I have a little different view of your situation. If I understand it, you are loaning money, but doing so in the form of taking a limited partnership interest in the owner's equity. Therefore, I see no reason to obtain state licenses in any state. If your interest is being acquired by a corporation or LLC, it will of course register to do business in the state, but that is not licensing. I hope this information is helpful, and thank you for choosing Pearl.com.
Customer: replied 1 year ago.

We are lending money to a special purpose entity and taking a collateral assignment of ownership interest in the entity as security. Not a mortgage. We are a commercial "lender".

 

Q: Are you aware of an expeditor service?

 

Q: What state agency would typically handle registration/licensing?

Expert:  Irwin Law replied 1 year ago.

Q: Are you aware of an expeditor service?

 

I do not believe that such a thing exists in the financial services arena. If it does, it goes by a name other than "expeditor service".

 

Q: What state agency would typically handle registration/licensing?

Typically, registration of foreign corporations is under the Secretary of State's office. If you were a commercial bank, which you don't appear to be, it would be under the state's department of financial institutions, or whoever regulates banks, S&Ls etc.... Most states do not regulate private commercial loans.

I hope this information is helpful, and thank you for using Pearl.com/Just Answer.

Expert:  Irwin Law replied 1 year ago.
Hello again. I notice that you read my Answer, but you have not rated it. If you need more information, please send a Reply to this. If not, I hope that you will enter a positive rating for my Answer so that I can receive compensation. Thanks again for using Pearl.Com- Just Answer.

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