There is a newer version
of
this Section
2017 Tennessee Code
Title 47 - Commercial Instruments and Transactions
Chapter 24 - Equity Participations
§ 47-24-102. Nature of transaction.
Universal Citation: TN Code § 47-24-102 (2017)
- (a) A lender has the right to participate in the borrower's enterprise or venture to such extent as may be set forth in a written agreement between the lender and the borrower; provided, that the original principal amount of the funds advanced to the borrower pursuant to the loan transaction shall be not less than five hundred thousand dollars ($500,000), or, alternatively, that there shall be contemplated to be a series of advances of money aggregating not less than five hundred thousand dollars ($500,000).
- (b) The consideration or value received by the lender in any such participation, as distinct from interest received pursuant to the loan transaction, shall not be deemed to be interest, loan charges, commitment fees, or brokerage commissions for purposes of chapter 14 of this title, notwithstanding the fact that the parties may describe such consideration or value to be interest or other such charges in a written agreement between the parties.
- (c) Nothing herein shall be construed to limit, modify, or otherwise affect rights which the lender may have, including, but not limited to, foreclosure rights, pursuant to the loan transaction.
- (d) The lender shall not be deemed to be a partner or joint venturer with the borrower, or otherwise jointly liable as to the financing with the borrower, as a result of such participation, unless the agreement between the lender and borrower shall expressly make the lender so liable.
Disclaimer: These codes may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
