"but doesn't it affect their equity in the business? The shareholder basis would change?"

Your partners have a different mix of ownership, yes.

You are now somewhat grasping the issues, as I explained. Try it conversationally.

Some named party or entity or plural, took loan(s) and the proceeds went where?

Some partners put some money of their own, where?

How is the leaving partner being paid? Personally, from each partner? Paid from the Entity? Perhaps the Entity is only "doing the banking" and every payout from the entity really is a draw for each remaining partner, because they did all of this wrong? They put their own money and the loan proceeds into the entity, but really, this is just between three people privately?