Equity Partners Ownership Restrictions without being vetted

[Jeff Greenberg]

In every Syndicated deal I have been involved in, the lender requires the equity partners to be vetted, and be a signer on the loan, if their overall ownership is above 20-25%.

1. I would like to hear a lenders point of view as to why this is required.

2. If a couple were to invest together, their ownership was over the 20-25%, so they decided that they would come in individually, coming in below the ownership limit. Would a lender (I know all lenders are different)feel that they are trying to pull one over on the lender or just playing by the rules that the lender has provided.