Loan Agreement Term Sheet for Singapore

Loan Agreement Term Sheet Template for Singapore

A Loan Agreement Term Sheet under Singapore law is a preliminary document that outlines the key commercial and legal terms of a proposed loan facility. It serves as the foundation for the subsequent detailed loan agreement, incorporating Singapore's robust banking and financial services regulatory framework. The document typically includes essential terms such as loan amount, interest rate, repayment terms, security arrangements, and key conditions, while adhering to requirements set by the Monetary Authority of Singapore.

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What is a Loan Agreement Term Sheet?

The Loan Agreement Term Sheet is a crucial preliminary document used in Singapore's lending landscape when parties are negotiating loan facilities. It captures the essential commercial and legal terms agreed between the lender and borrower before proceeding with detailed documentation. This document is particularly important in Singapore's sophisticated financial market, where it helps ensure compliance with local banking regulations while providing a clear framework for the final loan agreement. The term sheet typically precedes more detailed documentation and is used across various lending scenarios, from corporate financing to project loans.

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

1. Parties: Identification of lender and borrower with full legal names and registration details

2. Background: Context and purpose of the loan facility

3. Definitions: Key terms used in the term sheet including financial and technical definitions

4. Facility Amount: Principal amount of the loan and currency denomination

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 including installment structure

8. Security: Required collateral, guarantees, or other security arrangements

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

1. Conversion Rights: Terms and conditions for converting loan to equity, applicable for convertible loans

2. Prepayment Terms: Conditions and penalties for early repayment of the loan

3. Events of Default: Circumstances constituting default and consequent remedies

4. Conditions Precedent: Conditions that must be satisfied before loan disbursement

5. Covenants: Financial and operational commitments required from the borrower

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

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

2. Security Details: Comprehensive description of collateral or security arrangements

3. Form of Drawdown Notice: Standard template for requesting loan disbursement

4. KYC Requirements: Required due diligence documents and compliance checklist

5. Fees Schedule: Breakdown of all applicable fees including arrangement fees, processing fees, and other charges

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

Singapore

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Banking Act (Cap. 19): Primary legislation that regulates banking business and financial institutions in Singapore, setting requirements for licensed lenders

Moneylenders Act (Cap. 188): Regulates moneylending activities in Singapore, particularly applicable if the lender is not a bank or financial institution

Securities and Futures Act (Cap. 289): Relevant legislation when the loan involves securities or has convertible features

Contract Law (Cap. 43): Forms the foundation of contractual obligations in Singapore, based on common law principles

Personal Data Protection Act 2012: Governs the collection, use, and disclosure of personal data, relevant for handling borrower's information

AML/CFT Regulations: Anti-Money Laundering and Countering the Financing of Terrorism regulations for compliance with financial security measures

Consumer Protection (Fair Trading) Act: Provides protection for consumers in transactions, applicable if the borrower is a consumer

Companies Act (Cap. 50): Relevant when either the lender or borrower is a corporate entity

Stamp Duties Act: Governs the stamp duty requirements for loan documentation in Singapore

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore that affect loan agreements and financial institutions

Teams

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