Key Takeaways
- Private credit funds are private funds that typically engage in direct lending, providing loans to companies that may not have access to traditional bank financing, often focusing on the middle market.
- Faison Law Group is a boutique transactional law firm based in Millersville, Maryland, representing clients nationally, with emphasis on New York City, Boston, San Francisco, Southern California, Maryland, Washington, DC, Northern Virginia, Austin, Philadelphia, and South Florida.
- The firm focuses on fund formation, private credit transactions, FinTech, AI privacy, SBA-backed M&A, startup/venture work, securities compliance, corporate governance, and finance documents-not litigation or dispute work.
- Faison Law Group helps design mechanisms like buy/sell clauses, board tie-breakers, reverse vesting, and redemption rights to discourage founder or sponsor disputes that could damage a company or financing.
- This article is informational only and is not legal advice, investment advice, or an offer or solicitation of securities. To discuss a specific matter, call (667) 213-6640 or message Faison Law Group online.
What a Private Credit Fund Lawyer Does (and How Faison Law Group Fits In)
Private credit has become a major part of the finance world. U.S. direct lending volume reached about $369 billion across roughly 3,533 deals in 2025, according to ION Analytics. Private credit funds and credit funds provide private debt, unitranche, mezzanine, second lien, and structured finance solutions, often alongside private equity sponsors.
A private credit fund lawyer helps fund sponsors, private credit lenders, borrowers, investors, and financial institutions structure transactions before problems arise. That includes drafting fund documents, credit agreements, promissory notes, intercreditor agreements, agreements among lenders, guaranties, and collateral documents.
Faison Law Group’s private credit practice is transactional. The lawyers work at the deal table to advise on structure, regulatory matters, securities compliance, tax coordination, governance rights, and closing mechanics. The firm does not handle disputes or litigation.
If you are planning a private credit fund, lending platform, or financing transaction, call (667) 213-6640 or contact Faison Law Group online for a confidential discussion.
Why Private Credit Funds and Direct Lending Are Different from Traditional Bank Finance
Private credit is different from bank loans because the documents are often more bespoke. Banks may rely on standardized forms, while private credit transactions often involve negotiated covenants, reporting rights, downside protections, and customized capital structure terms for borrowers ranging from venture-backed companies to lower middle market service businesses.
These deals often touch private equity, equity investments, venture debt, acquisition financings, exit financings, real estate collateral, healthcare companies, life sciences ventures, software businesses, and SBA-backed M&A. Faison Law Group regularly works where finance, startup/venture, M&A, technology, and corporate documentation overlap.
Because these transactions are private does not mean they are regulation-free. Counsel must consider U.S. securities laws, state Blue Sky rules, Investment Advisers Act issues, lending license requirements, KYC, AML, and other regulatory frameworks.
Core Private Credit Fund Services Faison Law Group Provides
Faison Law Group provides a full range of transactional services for private credit, debt funds, hedge funds, private funds, sponsors, lenders, and institutional investor clients, including:
- Fund formation for LLCs, limited partnerships, domestic funds, parallel funds, and co-investment vehicles.
- Drafting Private Placement Memorandum documents, Limited Partnership Agreement documents, subscription agreements, investor questionnaires, and side letters.
- Advising on Regulation D, Rule 506(b), Rule 506(c), Regulation S, Investment Company Act exemptions, and Blue Sky filings.
- Drafting and negotiating credit facilities, security agreements, intercreditor agreements, subordination agreements, collateral documents, and guaranties.
- Designing board tie-breakers, consent rights, negative covenants, buy/sell rights, redemption rights, and reverse vesting structures.
- Supporting FinTech lenders, AI companies, life sciences ventures, SBA-backed buyers, family offices, general partners, and institutional investors.
- Coordinating with tax, accounting, valuation, employee benefits, and compliance advisors.
Faison Law Group aims to be a solutions oriented, leading provider of practical transactional advice for clients seeking sophisticated legal service at affordable, often fixed-fee rates.
Private Credit Fund Formation and Capital-Raising Structures
The formation of private credit funds involves structuring tailored fund structures that accommodate various debt investment strategies and investor classes, including both US and non-US tax-exempt investors. Legal counsel for private credit fund sponsors often includes guidance on structuring, forming, and raising capital for private credit funds tailored to various debt investment strategies and investor classes.
Fund lawyers are responsible for drafting the Private Placement Memorandum (PPM) and Limited Partnership Agreement (LPA). Lawyers also help formalize management fees, distribution waterfalls, hurdle rates, recycling provisions, defaulting investor remedies, clawbacks, and buy/sell provisions among general partners or management members.
Tax efficiency is vital for fund performance, especially regarding cross-border investments and tax-exempt investors. Effective tax structuring includes managing effectively connected income (ECI) and unrelated business taxable income (UBTI) for international and tax-exempt investors. Jurisdiction knowledge is also important for understanding the regulatory frameworks of a fund’s domicile, such as Delaware, Cayman Islands, or Luxembourg.
Private credit funds often utilize complex financing arrangements, including subscription credit facilities and collateralized loan obligations, to optimize their capital structure and enhance liquidity. Collateralized loan obligation structures are employed by private credit funds to access a broader range of capital for funding the origination and investment in private credit assets.
Designing Direct Lending and Private Credit Transactions
A private credit fund lawyer helps move a transaction from term sheet to closing. Transaction experience is crucial for understanding complex debt structures, which include senior secured loans, mezzanine financing, unitranche debt, and asset-backed lending.
Key documents often include:
- Term sheets and commitment letters.
- Credit agreements, promissory notes, and intercreditor agreements drafted by lawyers specializing in structuring loans.
- Security agreements, pledge agreements, and collateral perfection documents.
- Financial covenants, reporting covenants, events of default, and information rights.
- ICAs and AALs, because lawyers must understand intercreditor agreements (ICAs) and agreements among lenders (AALs) to protect capital in private credit funds.
Private credit fund sponsors require legal advice that addresses complex intercreditor arrangements and distressed situations, including workouts, restructurings, and bankruptcies. Faison Law Group’s role is transactional and preventative; when enforcement or litigation is needed, specialized restructuring lawyers handle enforcement of covenants and negotiations in cases of portfolio company defaults. Lawyers may also guide funds through workouts, restructurings, or foreclosures if borrowers fail, managing defaults in coordination with appropriate counsel.
Governance and Dispute-Prevention Tools for Private Credit and Private Equity-Backed Deals
Many private credit problems begin as governance problems. A borrower may still have assets and cash flow, but founder deadlock, sponsor conflict, or board paralysis can impair repayment and distract management.
Faison Law Group helps clients build dispute-prevention tools into documents, including:
- Reverse vesting for founders and key managers, where equity is subject to time-based or milestone-based vesting and may be repurchased or forfeited if a person leaves.
- Buy/sell clauses between co-founders, co-sponsors, or joint venture partners.
- Board tie-breaker provisions, independent director mechanisms, and board observer rights.
- Redemption rights, call rights, and put rights that may create a negotiated exit path.
- Clear information rights, consent rights, and default consequences.
These provisions should be tailored. They depend on facts, leverage, state law, tax, regulatory constraints, and negotiation dynamics.
How Private Credit Intersects with FinTech, AI, and SBA-Backed M&A
Private credit intersects naturally with Faison Law Group’s core practice areas: FinTech, AI privacy, SBA-backed M&A, life sciences, venture finance, and technology transactions.
FinTech lending platforms may use warehouse lines, forward flow arrangements, subscription credit facilities, NAV and hybrid facilities, and back leverage facilities to optimize their capital raising efforts. Subscription credit facilities are commonly used by private credit funds to provide capital call lines, which can be structured as bilateral deals or widely syndicated arrangements.
SBA-backed acquisitions may combine SBA 7(a) or 504 financing, seller notes, mezzanine debt, and private debt. AI-driven underwriting can raise privacy, bias, explainability, data security, and contractual risk-allocation issues. Faison Law Group’s technology and AI privacy background helps clients address these issues early.
The firm’s geographic focus includes early-stage tech and life sciences in Boston and San Francisco, growth-stage ventures in New York City, FinTech platforms in Austin and Washington, DC, and service companies in Maryland, Northern Virginia, Philadelphia, Southern California, and South Florida.
Working with Institutional Investors and Financial Institutions in Private Credit
Institutional investors, including sovereign wealth funds and US tax-exempt investors, face complex tax and regulatory considerations when evaluating commitments to private credit funds. Other participants may include pension plans, endowments, insurance companies, banks, trust companies, family offices, and strategic investors.
Faison Law Group can assist institutional investors and financial institutions with reviewing fund documentation, negotiating side letters, evaluating fee and expense allocation, reviewing conflicts disclosures, and assessing information rights-without offering investment advice or endorsing private fund investments.
The firm can also advise banks and financial institutions on documentation for subscription credit facilities, NAV and hybrid facilities, and similar facilities supporting private equity and private credit funds. Legal counsel should have connections with institutional investors to align fund terms with market standards, while still tailoring terms to the specific investment transactions.
Why Private Credit Funds Choose a Boutique Transactional Law Firm
A boutique firm can be attractive because the team is lean, partner involvement is direct, and the focus is practical execution. Faison Law Group brings a full spectrum transactional perspective across fund formation, corporate governance, securities, finance, M&A, technology, and regulatory matters.
The firm can represent fund sponsors, emerging managers, borrowers, lenders, private credit lenders, and private credit team members seeking commercially realistic documentation. It also understands founder-led companies and family-owned businesses, where overly theoretical documents can fail in real-world operations.
For certain projects, fixed-fee or predictable-fee options may be available. To discuss scope, timing, and fit, call (667) 213-6640 or submit a brief project overview online.
How to Engage Faison Law Group for Private Credit and Fund Matters
A typical engagement starts with a high-level discussion of the proposed private credit fund, direct lending platform, acquisition financing, or portfolio company transaction. Be ready to discuss stakeholders, target investors, borrowers, jurisdictions, assets, industries, timing, and existing documents.
Faison Law Group will typically review available materials, coordinate with tax and accounting advisors, identify key regulatory issues, and propose a scope of work, fee arrangement, and closing timeline. Lawyers assist managers in responding to legal questionnaires during fundraising and facilitate the lifecycle of a fund by designing tax-efficient structures and ensuring compliance with complex securities laws.
Confidentiality matters, but specific legal advice requires a formal engagement letter. Reading this article does not create an attorney-client relationship. To explore whether Faison Law Group is a fit, call (667) 213-6640 or message the firm online.
Important SEC and Regulatory Considerations
The regulatory landscape for private credit includes critical laws such as the Investment Advisers Act and Investment Company Act of 1940. Regulatory compliance requires knowledge of the Investment Advisers Act of 1940, SEC regulations, lending license requirements across different states or countries, the Securities Act of 1933, state Blue Sky rules, and anti-fraud obligations.
Attorneys help fund sponsors avoid violations of the Investment Company Act and navigate exemptions for fund registration. Legal compliance for private credit funds includes adherence to the SEC’s custody rule, particularly for complex organizational structures and investment strategies. Legal professionals implement “Know Your Customer” (KYC) and AML verification programs as part of anti-money laundering measures.
Cross-border fundraising may also require attention to regional rules like Europe’s AIFMD. Regulatory oversight in the private credit market is evolving, requiring funds and their sponsors to seek sophisticated legal counsel to navigate compliance and operational challenges.
Nothing in this article constitutes an offer or solicitation of securities, investment advice, legal advice, or a guarantee of investment outcomes. Actual analysis depends on the fund, strategy, investors, domicile, and facts.
Frequently Asked Questions About Private Credit Fund Lawyers
Do I need a separate private credit fund lawyer if I already have corporate counsel?
Often, yes. General corporate counsel may be useful for routine matters, but hiring a lawyer for a private credit fund requires specialized expertise due to the complex regulatory environment and unique structure of alternative lending. Some clients keep existing counsel and engage Faison Law Group for fund formation, private credit transactions, and financing structure.
Can Faison Law Group represent both the private credit fund and the borrower?
It depends on conflicts rules, consent, and the nature of the transaction. In many transactions, the fund and borrower use separate lawyers to ensure independent advice. Faison Law Group evaluates conflicts case by case before accepting an engagement.
What kinds of private credit clients does Faison Law Group typically represent?
The firm works with emerging and mid-size fund sponsors, FinTech lenders, SBA-backed acquirers, growth companies, private credit lenders, institutional investor clients, and certain financial institutions. The firm focuses on transactional matters and does not handle disputes, litigation, bankruptcy litigation, or regulatory enforcement defense.
How early should we involve a private credit fund lawyer in our planning?
Early involvement is best-ideally before signing a term sheet or circulating offering materials. Early legal review can help align structure, tax, securities compliance, governance protections, and market terms before costly revisions are needed. Call (667) 213-6640 or contact Faison Law Group online before committing to a structure.
Is this article legal advice or an invitation to invest in a private credit fund?
No. This article is for informational purposes only. It is not legal advice, investment advice, or an offer or solicitation to buy or sell any securities. Reading it does not create an attorney-client relationship with Faison Law Group or any of its lawyers. For specific advice, call (667) 213-6640 or use the online contact form.