The Bank Loan Term Sheet is a crucial preliminary document in Nigerian banking practice that precedes the full loan agreement. It is typically used when a financial institution and a potential borrower have reached an initial understanding on a proposed loan facility but need to document the key commercial terms before proceeding with detailed documentation. The term sheet captures essential aspects of the loan including the facility amount, interest rate, tenor, security package, and key conditions, while complying with Nigerian banking regulations, particularly the Banks and Other Financial Institutions Act (BOFIA) 2020 and Central Bank of Nigeria guidelines. This document serves multiple purposes: it helps parties reach alignment on key terms, provides a framework for due diligence, and serves as a reference point for preparing the full loan documentation. While generally non-binding, it demonstrates serious intent and commitment from both parties to proceed with the transaction.

1. Parties: Identification of the lender(s) and borrower(s), including registration details and addresses

2. Background: Brief context of the proposed loan facility and its purpose

3. Definitions: Key terms used throughout the term sheet

4. Facility Type and Amount: Type of loan facility and the principal amount being offered

5. Interest Rate and Fees: Applicable interest rate, calculation method, and all associated fees

6. Tenor and Repayment Terms: Duration of the loan and repayment schedule

7. Security Package: Overview of required collateral and security arrangements

8. Key Conditions Precedent: Essential conditions to be met before loan disbursement

9. Key Covenants: Principal financial and operational covenants

10. Events of Default: Major events triggering default

11. Governing Law: Confirmation of Nigerian law as governing law

12. Binding Effect: Statement on whether the term sheet is binding or non-binding