Simple Loan Term Sheet for Switzerland

Simple Loan Term Sheet Template for Switzerland

A Simple Loan Term Sheet governed by Swiss law serves as a preliminary document outlining the key commercial and legal terms of a proposed loan arrangement. It captures essential elements required under Swiss contract law, particularly the Swiss Code of Obligations (OR/CO), including loan amount, interest rates, repayment terms, and security arrangements. While not typically legally binding in its entirety, it forms the basis for the subsequent detailed loan agreement and helps parties align their understanding of the proposed transaction's fundamental terms. The document incorporates Swiss-specific legal requirements and banking regulations where applicable.

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What is a Simple Loan Term Sheet?

The Simple Loan Term Sheet is a crucial preliminary document used in Swiss lending transactions to establish the fundamental terms and conditions of a proposed loan before proceeding with detailed documentation. It serves as a roadmap for the preparation of the final loan agreement and is commonly used in both corporate and private lending scenarios. The document typically includes essential commercial terms such as loan amount, interest rate, repayment schedule, and any security arrangements, all structured in compliance with Swiss law, particularly the Swiss Code of Obligations. While most provisions in a term sheet are non-binding, certain elements like confidentiality and exclusivity may be specifically made binding. This document is particularly valuable in complex lending situations where parties need to reach a preliminary understanding before investing in full documentation, and it helps ensure all parties have aligned expectations regarding the proposed transaction's key terms.

What sections should be included in a Simple Loan Term Sheet?

1. Parties: Identification of the Lender and Borrower with full legal names and addresses

2. Background: Brief context of the loan arrangement and purpose

3. Definitions: Key terms used throughout the term sheet

4. Loan Amount: Principal amount of the loan in specified currency

5. Interest Rate: Applicable interest rate, calculation method, and payment frequency

6. Term: Duration of the loan and maturity date

7. Repayment Terms: Schedule and method of repayment (bullet, amortizing, etc.)

8. Security: Any security or collateral required for the loan

9. Conditions Precedent: Key conditions that must be satisfied before drawdown

10. Representations: Basic representations made by the borrower

11. Governing Law: Confirmation of Swiss law as governing law and jurisdiction

What sections are optional to include in a Simple Loan Term Sheet?

1. Financial Covenants: Include when specific financial metrics need to be maintained by the borrower

2. Prepayment Terms: Include when early repayment is permitted and any associated penalties

3. Events of Default: Include when specific default triggers need to be outlined

4. Information Requirements: Include when ongoing financial reporting is required

5. Tax Provisions: Include when there are specific tax implications or withholding requirements

6. Transfer Provisions: Include when the loan may be transferred or syndicated

7. Use of Proceeds: Include when the loan must be used for specific purposes

8. Insurance Requirements: Include when specific insurance coverage is required for security

What schedules should be included in a Simple Loan Term Sheet?

1. Repayment Schedule: Detailed schedule of repayment dates and amounts

2. Security Details: Detailed description of any security or collateral

3. Form of Drawdown Notice: Template for requesting loan disbursement

4. Conditions Precedent Documents: List of required documents to be provided before drawdown

5. Financial Covenant Calculations: Formulas and methods for calculating financial covenants

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking & Financial Services

Real Estate

Manufacturing

Technology

Healthcare

Construction

Retail

Agriculture

Energy

Infrastructure

Professional Services

Hospitality

Education

Transportation & Logistics

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit Analysis

Corporate Development

Investment

Business Development

Operations

Corporate Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Banking Relationship Manager

Credit Officer

Risk Manager

Investment Manager

Financial Controller

Loan Officer

Compliance Officer

Corporate Secretary

Business Development Manager

Finance Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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