Get a syndicated business loan

What is a Syndicated Business Loan?

A syndicated loan refers to an arrangement between two or more banks to provide credit facilities or loans for business. This is done by the banks as a syndicate, using common debt documents. For SMEs, this is the most promising route to avail of any type of credit facility, whether a term loan, working capital facility, bank guarantee, or any loan against property.

What are the benefits of a syndicated loan?

What are the stages involved in a syndicated business loan process?

There are 3 stages in the process of granting syndicated loans for business-

This stage is also called the pre-mandate stage and is initiated at the behest of the borrower. Here, the borrower either speaks to a single lender or invites competitive bids from several lenders. He then chooses the lead lender to provide him a loan for a business interest rate he is comfortable with. The lead bank will start the appraisal process for loans for business startups by assessing the need of the borrower. It will also design the necessary loan structure and develop the appropriate credit proposal.

In this stage, the lead lender starts the process of selling the loans for business by preparing a term sheet, information memorandum, and the necessary legal documentation. It will then approach other banks for participation. The business loan will be disbursed after the loan contract gets finalized.

This stage involves the process of monitoring utilizing an escrow account, in which the borrower will be asked to deposit the revenue. An agent will ensure timely repayment of the loan, before making any other payments. The agent will also manage the regular operations of the loan facility in the post-closure stage.

What are the steps associated with the Syndicated Loan Process & Packages of Vakilsearch?

Our professionals will understand your requirements and suggest solutions based on the information provided. If you are interested in going ahead, we will finalize the scope of work and terms of the mandate.

In this crucial step in the process, a seasoned industry veteran will prepare projections and a detailed project report. You will also need to provide various documents at this point, such as annual reports, income tax returns, bank statements, and board resolutions. All the raw data will be converted into the format understood by the lenders.

We will advise you on the banks that provide loans for business. This will be based on (i) which banks are bullish for the sector, (ii) which bank will consider the security, (iii) past relations, (iv) success rates, (v) speed of approvals, (vi) approval hierarchy and many more. It is important to systematically approach lenders in phases with a maximum of five banks in each phase. It is this step that decides the success of the proposal. We will apply and, based on the feedback received, would fine-tune the proposal.

Constant follow-up with each lender is very important. As every bank that provides loans for business has its own set of guidelines to evaluate any given proposal, each will have a separate set of queries to be resolved. At this stage, there will be multiple communications between bankers, syndicators, and clients.

On securing in-principal approval, negotiations with bankers would take place in terms of deals such as pricing (interest rates & fees), tenor, repayment schedule, moratorium period, covenants, and so on. The sanction letter would be received from the bank at this stage.

Before the funds are released, certain compliances need to be fulfilled. For providing loans for a business, the bank would require NoCs from various stakeholders, drawdown requests, unqualified financial/legal due diligence certificates, compliance with all CPs to the loans, and so on. Simultaneously, the drafts of all the loan documents would generally be circulated for review to all the parties. After all the documents are vetted and signed, the funds will be released as loans for business startups.

Why Vakilsearch?

We connect you to verified expert lawyers, who will work on your documents until you're completely happy. You can track the progress on our platform at all times.

Clients are delighted with our service! They have consistently rated us highly because of our focus on simplifying legal requirements and providing regular updates.

Our team of experienced business advisors are just a phone call away, should you have any queries about the process. Our team will ensure that your interaction with professionals is smooth and seamless.