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Use explicit language with notice to enforce security

Thursday, September 29, 2016 @ 8:00 PM | By Lisa Corne

Early termination fees, or make whole payments, as they are sometimes called, are common features in commercial lending arrangements. They serve to compensate lenders for the financial loss arising from early repayment of a loan and provide lenders with the certainty of a specified rate of return in the event that the loan is repaid before maturity.

They also provide a means by which lenders may recoup upfront costs incurred in conducting due diligence investigations prior to extending a financing commitment. As such, they are an...