What is a term sheet for a loan?

A term sheet is designed to help the parties to the loan to set out clearly and in advance, the terms on which the loan will be made. It serves as a non-binding letter of intent which summarises all the important financial and legal terms as well as quantifying the amount of the loan and its repayment.

How do you draft a term sheet?

How to Prepare a Term Sheet

  1. Identify the Purpose of the Term Sheet Agreements.
  2. Briefly Summarize the Terms and Conditions.
  3. List the Offering Terms.
  4. Include Dividends, Liquidation Preference, and Provisions.
  5. Identify the Participation Rights.
  6. Create a Board of Directors.
  7. End with the Voting Agreement and Other Matters.

What is a commercial loan term sheet?

The term sheet is an important document in commercial real estate lending. It is used to outline the terms of a potential loan prior to fully underwriting the deal and issuing a commitment letter.

What is a good term sheet?

A term sheet might just be one page, or it could be 10 pages long. Generally speaking simplicity is often preferred by founders, but it pays to have clarity and make sure all bases are covered.

Who drafts a term sheet?

Ideally, a lawyer should draft the Term Sheet. It will ensure clarity and proper use of technical legal terms in the Term Sheet. 14.

What is a term sheet for real estate?

The Term Sheet or Letter Of Intent The Term Sheet, also known as a Letter of Intent (LOI) sets forth the basic terms and conditions of the real estate transaction.

Is a term sheet legally binding?

A term sheet usually has some provisions that are called out as being “binding” even though the rest of the term sheet is typically not binding. The effect of a “non-binding” term sheet is that parties are not obligated to complete the transaction.

Is a term sheet a legal document?

Although term sheets are not generally legally binding, other than in respect of confidentiality, exclusivity (if applicable), costs and jurisdiction, they evidence the intent of the parties to them. Therefore, once something is agreed in a term sheet, it may be difficult for either side to renegotiate.

What does term sheet mean in private lending?

Often a Term Sheet will indicate a targeted first closing date, after which ongoing closings may occur on a continuous basis. In private lending, the owner of the Borrower is often required to guarantee the loan interest and principal payments being made by their company.

What should be included in a loan term sheet?

The legal name and location of the obligor for the indebtedness. It is very important that this be very specific and absolutely accurate in terms the legal description of the Borrower. The Lender’s name or, for a syndicated loan or note offering, the type of Investors being offered participation (e.g., Accredited Investors).

What are the terms of the term sheet?

This Term Sheet sets out the commercial terms and conditions pursuant to which the Lender has agreed to provide a loan facility of up to ZAR 65 million to the Borrower. 84612-1 Page 2 of 7 Status of this Term Sheet

Is there a disclaimer on this loan term sheet?

DISCLAIMER: This is a sample loan term sheet for discussion purposes only in connection with the associated webinar. This loan term sheet and webinar are being provided for educational purposes only and are not intended to be construed as legal advice.

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