8.1. Interest. Because of his shareholding or his interest in the company, no interest is paid to a member. (4) Among members in relation to their capital inflows, as long as they represent a return on investment. Private equity and venture capital funds are increasingly eager to use credit facilities to provide short-term liquidity to these funds. These credit facilities are generally structured in the form of a capital credit facility or underwriting facility where the lender agrees to lend to the Fund on the basis of a certain percentage of the remaining non-called capital of the fund (i.e. the amount of capital the fund can use from its investors). Although some of these facilities are not guaranteed, most of them are generally guaranteed either by a flat-rate pledge or by a limited pledge on the income of the fund`s capital receivables, on the right of the fund and its co-owner or director (management company) to obtain a call to capital and on the Fund`s investments. The challenge that often arises when lenders and funds structure a capital appeal facility is whether the single limited partnership or the Fund`s operational agreement (fund document) is designed to meet the lender`s vigilance obligations, so that the lender is sufficiently confident that (1) the fund is able to create and repay debts , 2) the fund and its managing body may grant the lender security shares in the applicable guarantee. and (3) the fund can obtain capital from its investors with limited restrictions. If the lender is dissatisfied with the provisions of the Fund document, the lender may require the Fund to amend its fund document, requiring the Fund to contact its investors, often resulting in delays in obtaining financial resources and higher costs to the Fund.
It is therefore recommended that funds include certain provisions in their fund documents that meet the requirements of lenders for such a credit facility. Below are provisions that lenders will look for in a fund document when assessing whether credits should be extended to a fund, as well as some examples of clauses typically marked by lenders, as well as another proposed language, generally more accessible to lenders in these credit facilities: 1.