Closing mechanics

You've negotiated everything negotiable. What remains between you and the first draw is the closing checklist — a genuinely bureaucratic artifact, usually maintained by the lender's counsel, tracking every document, signature, and condition precedent. A representative one has thirty to fifty line items. Here's the anatomy, and where the traps are.

The document stack

The core agreements. The loan and security agreement (the big one — Part 8 was about its contents); the collateral documents (security agreements over specific asset classes — sometimes separate IP security agreements covering trademarks, patents, copyrights, each filed with the relevant registry); the servicing agreement (you as servicer, with the fee and termination mechanics); the backup servicing agreement (tri-party: you, the backup, the lender); guaranties (parent and/or personal, per whatever Part 5 negotiation landed); and if there are warrants, the warrant and warrant issuance agreement — which, reminder, are usually defined as loan documents, so their breach defaults the facility.

The account plumbing. Deposit account control agreements for every controlled account. Start these first. DACAs are tri-party agreements requiring your bank's legal department to engage, and bank legal departments move on geological time — four to eight weeks is normal, and nothing else can slot around them. If the structure requires new accounts at a lender-approved bank, add onboarding time on top. The number of closings delayed by a DACA is much larger than the number delayed by any negotiation.

The filings. UCC-1 financing statements perfecting the lender's security interest — filed against the exact legal entity name, which is why the perfection certificate (below) obsesses over it. Lien searches confirming no competing claims: any surprise lien found here (an old equipment lease filing someone forgot, a bridge note from 2021 nobody terminated) must be released or subordinated before close. Run your own lien search two months early; finding your own surprises beats having them found.

The corporate certificates. Secretary's certificate (charter, bylaws, board resolutions authorizing the whole transaction — get the board meeting scheduled now), incumbency certificate (who's authorized to sign), good-standing certificates from your state(s) (order early; some states take weeks).

The legal opinions. Your counsel opines the deal is duly authorized and enforceable; in SPV structures, add the specialty opinions — true sale (the loans really moved to the SPV and a bankruptcy court shouldn't claw them back) and non-consolidation (the SPV really is separate from you). These are expensive, slow, and non-negotiable; they're also the legal spine of "bankruptcy-remote," so don't resent them too much.

The operational conditions. Underwriting and servicing policies attached as exhibits (now frozen — Part 5's guideline lock starts here); insurance certificates naming the lender (D&O, sometimes key-person life — insurance procurement takes weeks, start early); the initial borrowing-base certificate and first advance request; evidence any required equity milestone was met.

The perfection certificate: paperwork with teeth

Somewhere in the stack is a document that looks like an intake form and deserves your personal attention: the perfection certificate. It's a certified questionnaire about your company — and everything in it becomes a representation under the loan agreement, where inaccuracy equals default.

What it asks, and why each answer has teeth:

• Exact legal name, jurisdiction, entity IDs, and every trade name used in the past five years. UCC filings made against a wrong or stale name can be legally ineffective — so the lender needs the exact string, and you're certifying it. Also expect a covenant requiring advance notice before any future name/state change; file that away for your someday-rebrand.
• Capitalization table. Often becomes the baseline for the change-of-control default definition. The cap table you attach here is now a credit document — keep that in mind the next time a secondary transaction gets discussed casually.
• Every bank and brokerage account, with balances. This is the map for the DACA requirement. An account you forget here is an account outside the control structure — which, post-closing, is a covenant breach waiting to be noticed.
• All existing debt and liens. Critically: only what's listed gets grandfathered as "permitted." The forgotten equipment lease, the founder loan from 2020, the convertible note that never got cleaned up — unlisted means unpermitted means default. Sweep the closet properly.
• Litigation, taxes, IP inventory, locations, subsidiaries. Same logic throughout: the certificate defines the baseline reality the whole facility assumes, and deviations from certified reality are defaults.

The meta-point: someone senior — realistically a founder plus your GC or counsel — should verify every line personally. This is not a form to delegate to whoever has free time in closing week. "Sloppy intake paperwork" and "misrepresentation event of default" are the same thing wearing different clothes.

Running the close

Assign one internal owner. One person who holds the checklist, chases every open item daily, and runs a standing call with both counsel in the final weeks. Closings have dozens of parallel workstreams across four organizations (you, lender, two law firms, plus banks and vendors); unowned items simply don't move.

Sequence by lead time, not by importance. The long poles are almost never the agreements — they're the DACAs, the insurance, the good-standing certificates, the lien cleanups, the board logistics, and any required third-party consents. Start all of them the week the term sheet is signed.

Expect a fee crescendo. Closing week is when the invoices concentrate: upfront fee, deposits applied, both legal bills, initial diligence pass-throughs, first-year service-provider retainers. Have the Part 6 model open so nothing on the closing statement surprises you — and reconcile the closing statement line by line against the sheet. Fees have a way of drifting upward between documents; closing statements are where you catch it.

And then: funding day. Money moves, filings go live, and the facility exists. Take the afternoon. One afternoon :)

Because here's the reframe that matters more than any checklist item: closing is not the finish line — it's the starting line. Every obligation you negotiated becomes live the next morning: the first weekly borrowing-base report is due within days, the reporting clock is running, the covenants are testing, and the relationship you'll depend on for waivers, amendments, and upsizes is now being built one interaction at a time.

Which is what the next part is about.