Change of control clause
What is a change of control clause in a business loan?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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A change of control clause lets a lender act — require repayment, or review the facility — if the ownership or control of the borrower changes without its consent. A bank lends to a business and to the people running it, and a sale can change both the risk and the strategy the loan was approved for. It is the clause that turns the sale of a business into a refinancing question, which is why the bank is one of the first calls a seller needs to make, well before the deal is signed.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
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