Private Lending 101: Foundational Considerations for Forming a Debt Fund

January 8, 2026

In the dynamic landscape of private lending, the strategic establishment of a debt fund becomes a pivotal move for those who seek to be a true direct lender or balance sheet lender. In this introductory guide, we’ll lay out the basic considerations when forming a debt fund.

A debt fund, whether structured as an LLC or LP, functions as an entity that raises capital by selling ownership interests to investors. This entity plays is designed for funding, holding and selling (if needed) loans.

About the author

Kevin Kim, Esq.

Partner – Corporate & Securities at Fortra Law

Kevin Kim leads Fortra Law's Corporate and Securities practice, advising private lenders, real estate developers, and investors on fund formation, private placements, and securities offerings. He has structured hundreds of transactions, including mortgage funds, structured debt offerings, real estate syndications, crowdfunding offerings, EB-5 projects, and Qualified Opportunity Funds. A nationally recognized expert in mortgage fund formation, Kevin serves as lead instructor for the American Association of Private Lenders' Certified Fund Manager courses. He also hosts Lender Lounge with Kevin Kim, a podcast featuring conversations with leaders across the private lending industry.