Term sheet

A term sheet is a document setting out the proposed key terms of a facility — amount, rate, term, security and major conditions — issued once a lender has reviewed enough of a file to make a considered offer, but generally before full credit approval and formal loan documentation. Most term sheets are expressed as indicative and subject to conditions, meaning the final terms can still move if something material changes once full due diligence is complete, though a reputable lender's term sheet should reflect genuine appetite rather than a placeholder designed simply to keep a file engaged. For a borrower, a term sheet is the point at which a facility becomes concrete enough to plan around — engaging lawyers, ordering a formal valuation, or notifying an existing lender — while still understanding that credit approval and documentation remain ahead. Comparing term sheets from more than one lender at this stage, before committing exclusively to one, is common practice and generally accepted by lenders.

Related

Commercial property loans · Indicative terms · Credit approval