Debt Financing
Red flags
The clauses that do not just make a loan expensive but strip your ability to fight when it sours: judgments with no hearing, portfolio-wide defaults, all-asset liens.
Most of this pillar is about what a loan costs. This section is about what a loan can do to you when it goes wrong, through clauses that were put there for exactly that moment. They are the terms that do not merely make a deal expensive but strip away your ability to fight when it sours: a judgment with no hearing, a default that cascades across your whole portfolio, a lien on everything you own, a lender that can call the loan because it feels like it. They are enforceable, they look ordinary, and they are the shortest clauses in the document.
The dangerous clauses are not the expensive ones. They are the ones that remove your ability to resist when the deal turns, and they are written to look routine.
This section is a catalog you run before you sign. A confession of judgment that lets the lender skip the courtroom. Cross-default and cross-collateralization that tie your deals together so one failure sinks the rest. A merchant cash advance dressed as a purchase to dodge the usury caps. A blanket lien that reaches past the financed asset to everything else. And discretionary-default clauses that let the lender accelerate on its own judgment, no missed payment required. Each page names the clause, shows what it does, and tells you where it hides.
The six pages are below. Learn the names, because a clause you can name is a clause you can strike.