Senior Loan Term Sheet
Senior Loan Term Sheet
I. Overview
This Term Sheet outlines the principal terms and conditions proposed for the Senior Loan to be extended to [Your Company Name] ("Borrower") by [Lender Name] ("Lender"). This document serves as a preliminary agreement and will be followed by a definitive loan agreement that elaborates on the terms herein in greater detail. This Term Sheet is intended to facilitate further discussions and does not constitute a legally binding obligation until a full agreement is executed by all parties.
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Borrower: [Your Company Name]
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Lender: [Lender Name]
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Purpose of Loan: The funds will be used for [Specify Purpose of Loan, e.g., working capital, expansion, debt refinancing].
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Date of Issue: [Date]
II. Loan Amount and Disbursement
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Total Loan Amount: The total loan amount will be [Specify Loan Amount].
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Disbursement Schedule: The loan amount will be disbursed as follows:
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First Disbursement: [Specify Amount] on [Specify Date]
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Subsequent Disbursements: Based on milestones agreed between [Your Company Name] and [Lender Name].
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Final Disbursement: To be made by [Specify Date], subject to fulfillment of conditions set forth in this Term Sheet.
III. Interest Rate and Repayment Terms
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Interest Rate: The loan will carry an interest rate of [Specify Interest Rate]% per annum.
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Interest Calculation: Interest will be calculated on a 360-day year basis and charged on the actual outstanding balance.
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Repayment Schedule:
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Repayment will commence [Specify Period, e.g., six months] after the first disbursement.
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The loan will be repaid in [Specify Number] equal quarterly installments of principal plus accrued interest, starting [Specify Start Date].
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IV. Security and Covenants
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Collateral: The loan will be secured by [Specify Collateral, e.g., property, equipment, inventory].
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Covenants: [Your Company Name] agrees to maintain the following financial ratios throughout the term of the loan:
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Debt to Equity Ratio: Not to exceed [Specify Ratio]
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Current Ratio: Minimum of [Specify Ratio]
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Additional Security: [Your Company Name] will provide [Additional Security Measures] if specific performance targets are not met.
V. Conditions Precedent to Disbursement
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Legal and Regulatory Approvals: All necessary legal and regulatory approvals must be obtained prior to any disbursement of the loan funds.
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Due Diligence: Completion of satisfactory due diligence by [Lender Name], including but not limited to financial, legal, and operational aspects of [Your Company Name].
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Documentation: Execution of definitive loan documentation including but not limited to a Loan Agreement, Security Agreement, and any other related documents.
VI. Representations and Warranties
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Accuracy of Information: [Your Company Name] represents and warrants that all financial statements and other information provided to [Lender Name] are true, accurate, and complete.
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Compliance with Laws: [Your Company Name] warrants that it is and will remain in compliance with all laws and regulations applicable to its operations and the use of the loan funds.
VII. Miscellaneous
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Governing Law: This Term Sheet and the ensuing loan documents will be governed by the laws of [Specify Jurisdiction].
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Confidentiality: Both parties agree to keep the terms of this loan and all related negotiations confidential.
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Amendment: This Term Sheet can only be amended in writing signed by both parties.
This Term Sheet is intended to outline the fundamental terms of a Senior Loan and facilitate further negotiation towards a definitive agreement. Please review carefully and provide feedback or confirmation of the terms so that we may proceed to finalize the loan documentation.
Name: [Your Name]
Date: [Date Signed]
Name: [Lender's Name]
Date: [Date Signed]
