Investor changes mid-loan: assignments, buyouts, advances, and recapitalizations

A participation percentage is a result, not a cell

An investor's share is the output of a capital history — contributions, transfers, and returns over time. Overwrite the percentage and you erase the history that produced it, along with your ability to explain any distribution that came before. Treat ownership as a ledger of dated capital events, and the percentage falls out of the math.

Start from the position on Harbor Mixed-Use:

Contribution, transfer, and return are different

New money in is a contribution; money moving between investors is a transfer; money out is a return of principal. Each affects shares differently, and each must be recorded as its own event. A transfer changes who owns what without changing total principal; a contribution or return changes the total. Booking a transfer as a contribution inflates the loan's capital and breaks the reconciliation.

Assignment and buyout

An assignment moves a position from one investor to another. A buyout ends one investor's stake and redistributes it to the rest. Both preserve the outgoing investor's record up to the event date, including the distributions they earned while they held the position. If Aster is bought out and its $102,000 is split pro-rata, Lumen and Cardoza absorb it in proportion — and Aster's prior earnings stay on the record.

Investor entry and exit

An investor entering mid-loan takes a share priced at the entry date; one exiting stops earning from the exit date. Their historical distributions remain part of the loan's record. The math only works if every entry and exit is dated, because interest and distributions before and after the event belong to different owners.

Non-pro-rata advance or paydown

This is where spreadsheet percentages silently break. When only some investors fund an advance, or a paydown returns capital unevenly, shares shift non-proportionally — and a static percentage column simply stops matching the capital. If Lumen alone funds a $50,000 advance, Lumen's principal and share both rise while the others' shares fall, even though no one else did anything. Record the capital movement; let the shares recompute.

Recapitalization

A recapitalization resets the capital stack — new investors, new proportions, sometimes new terms. Treat it as a dated event that supersedes the prior ownership structure rather than deleting it, so the loan can still show who owned what before the recap and who owns what after.

Reconcile principal before posting

After any capital event, the sum of investor principal must still equal the loan balance. Reconcile before you post distributions — a capital event that leaves the book unbalanced will misallocate every distribution that follows it. This one check catches the large majority of investor-accounting errors.

Reporting after the event

Once the event is posted and reconciled, each investor's next statement should reflect the new position without any restatement of what came before. Entry, exit, and non-pro-rata events are exactly the moments an investor scrutinizes their statement, so the numbers have to trace cleanly to the dated event.

Where LoanConsole fits

LoanConsole handles assignments, buyouts, investor additions and exits, non-pro-rata capital activity, and recapitalizations as dated events, and preserves the prior ownership record rather than overwriting it.