Carta vs Forge When Your Warehouse Lender Outranks Both

Warehouse credit facilities, the revolving lines specialty lenders use to fund originations before securitizing or selling loans, almost always include change-of-control covenants requiring lender consent before any significant ownership change at the borrower or its parent. Before pricing a partner's buyout, pull the warehouse facility agreement and confirm the exact ownership-change threshold that triggers a consent requirement, since it's often lower than people assume.

Carta's structured buyback mechanics work fine for the administrative side of a transaction: setting a price, running the offer, updating records. They have no visibility into your warehouse facility's covenant package, so a transaction run entirely through Carta without a parallel lender consent process risks technically triggering a covenant default, regardless of how clean the cap table mechanics look.

Setting aside that Forge's outside buyer network is built around companies already recognizable to institutional secondary buyers, mostly venture-backed technology names, a marketplace transaction still can't override a warehouse lender's contractual consent right. If a sale or transfer requires lender consent under the credit agreement, that consent has to be obtained regardless of where or how a buyer is found.

Get warehouse lender consent, or written confirmation that the specific transaction falls below the covenant's threshold, before finalizing price or closing anything. Lenders often move faster than people expect once they understand the transaction, but starting that conversation late is the single most common way these deals get delayed or complicated.

Prepare a complete package for the warehouse lender: the specific ownership change being proposed, updated financials or pro formas showing the transaction doesn't affect the borrowing base or covenant compliance, and a clear timeline for when you'd like to close. A complete, well-organized request tends to move faster through a lender's internal approval process than a partial one that generates follow-up questions.

Prepare the consent package for the warehouse lender with these pieces:

• The specific ownership change being proposed, stated plainly and completely.
• Updated financials or pro formas showing the transaction doesn't affect the borrowing base or covenant compliance.
• A clear timeline for when you would like to close.
• The exact change-of-control threshold from your facility agreement, so the lender sees you have read it.

Budget four to eight weeks for warehouse lender consent, depending on the lender's internal process and how complete your initial submission is. Run pricing and documentation for the equity transaction itself in parallel with the consent request rather than sequentially, so you're not adding the two timelines together, but don't close until consent, or confirmation the transaction falls below the covenant threshold, is actually in hand.

The most common mistake is announcing an agreed buyout to the departing partner before confirming the warehouse lender will actually consent, effectively promising something that isn't fully in the company's control to deliver. Say the partners agree on price and timeline, tell the departing partner it's essentially done, and then the warehouse lender's review surfaces a concern that delays or reshapes the deal; the departing partner now feels misled even though nobody intended that.

Keep any communication to the departing partner conditional on lender consent until that consent is actually confirmed in writing. Use plain, specific language, such as 'agreed in principle, pending lender consent,' in every conversation and written communication until the consent letter is actually in hand, so expectations stay accurate even if the lender's review takes longer or raises questions along the way.

Make warehouse lender consent, or written confirmation the transaction falls below the covenant threshold, an explicit condition precedent to closing, not just a step the company represents has been handled. This gives both the departing partner and the company a clear, shared checkpoint rather than relying on an informal update about how the lender conversation is going.

Also negotiate who bears the cost if the lender requires updated terms, a fee, a covenant amendment, additional reporting, as a condition of consent, since these costs can be meaningful and it's worth agreeing upfront rather than after the lender's requirements are already known and one side feels ambushed by them.

Keep a written summary of every conversation with the lender through the consent process, so there's a clear record of what was asked, what was answered, and precisely when, in case a question about the process comes up again later, whether from the departing partner, a future lender, or an outside auditor reviewing the closed file well after closing.