Equity Pledge, instead of 2nd lien

[Raj G.]

Hi,

I have been doing private lending for a very long time, most of time first lien, some time 2nd lien also.

recently came across a situation where first lien is already there on property and there is clause than 2nd lien can not be done on property.

Investor(borrower) giving me option that we can prepare a new document for "Equity pledge" this mean conditional equity in property if there is default.

I never heard this thing before.

any one any input on this.

Thanks in advance.