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Private Lending Term Sheet for Australia

Private Lending Term Sheet Template for Australia

A comprehensive template for documenting the key terms and conditions of a private lending arrangement under Australian law. This document serves as a preliminary agreement outlining the essential commercial and legal terms of a proposed loan facility, including facility amount, interest rates, security arrangements, and key conditions. It complies with Australian lending regulations and incorporates relevant requirements from the National Consumer Credit Protection Act, Personal Property Securities Act, and other applicable legislation. The template is designed to form the basis for the subsequent detailed loan agreement while providing clarity on the fundamental terms of the lending arrangement.

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Private Lending Term Sheet

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What is a Private Lending Term Sheet?

The Private Lending Term Sheet Template is a crucial document used in the Australian lending market to establish the preliminary framework for private lending arrangements. It serves as an initial agreement document that captures the essential commercial and legal terms of a proposed loan facility before proceeding to full documentation. The template is designed to comply with Australian lending regulations and practices, including requirements under the National Consumer Credit Protection Act 2009 and related legislation. It provides a structured format for documenting key aspects such as facility terms, pricing, security arrangements, and conditions precedent, while remaining flexible enough to accommodate various lending scenarios. This document typically precedes the formal loan agreement and helps ensure all parties have a clear understanding of the proposed terms before proceeding with detailed documentation and due diligence.

What sections should be included in a Private Lending Term Sheet?

1. Parties: Identification of the lender and borrower, including full legal names and ABNs/ACNs

2. Background: Brief context of the lending arrangement and purpose of the facility

3. Definitions: Key terms used throughout the term sheet

4. Facility Details: Type of facility, facility limit, and purpose

5. Interest and Fees: Interest rate, calculation method, payment frequency, and all applicable fees

6. Drawdown: Conditions and process for accessing the facility

7. Repayment Terms: Repayment schedule, method, and timing

8. Security: Overview of security requirements and guarantees

9. Key Conditions Precedent: Essential conditions that must be satisfied before the facility becomes available

10. Key Undertakings: Primary obligations of the borrower during the facility term

11. Events of Default: Key circumstances that would constitute a default

12. Governing Law: Specification of Australian law and jurisdiction

What sections are optional to include in a Private Lending Term Sheet?

1. Financial Covenants: Specific financial ratios and requirements - include when lending to businesses or when specific financial performance metrics need to be maintained

2. Insurance Requirements: Specific insurance obligations - include when security includes physical assets or when borrower's insurance is critical to risk assessment

3. Mandatory Prepayment: Circumstances requiring early repayment - include for larger facilities or when there are specific trigger events

4. Review Events: Circumstances triggering a review of the facility - include for longer-term facilities or when monitoring specific business conditions

5. Permitted Security Interests: Allowable security interests over assets - include when borrower has other creditors or complex security arrangements

6. Change of Control: Provisions regarding ownership changes - include when lending to companies or where borrower's ownership is critical

7. Cross-Default: Links to other financial obligations - include when borrower has multiple facilities or financial commitments

8. Special Purpose Vehicle Requirements: Additional requirements for SPV borrowers - include when lending to an SPV structure

What schedules should be included in a Private Lending Term Sheet?

1. Facility Limits and Sublimits: Detailed breakdown of facility components and any sublimits

2. Fee Schedule: Comprehensive list of all fees, calculations, and payment timing

3. Security Details: Detailed description of all security assets and registration requirements

4. Conditions Precedent Checklist: Complete list of all required conditions precedent and supporting documents

5. Drawdown Notice Form: Template form for drawdown requests

6. Financial Covenant Calculations: Detailed methodology for calculating financial covenants

7. Permitted Financial Indebtedness: List of allowed existing and future financial obligations

Authors

Alex Denne

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

Jurisdiction

Australia

Publisher

tiktok˰

Document Type

Loan Agreement

Sector

Cost

Free to use
Relevant legal definitions






































Clauses

























Relevant Industries

Financial Services

Real Estate

Commercial Property

Residential Property

Small Business

Corporate Finance

Agriculture

Manufacturing

Retail

Technology

Healthcare

Construction

Mining

Infrastructure

Professional Services

Relevant Teams

Legal

Finance

Credit

Risk Management

Treasury

Compliance

Commercial

Investment

Portfolio Management

Operations

Due Diligence

Relevant Roles

Chief Financial Officer

Finance Manager

Credit Manager

Risk Manager

Legal Counsel

Commercial Manager

Lending Officer

Credit Analyst

Financial Controller

Treasury Manager

Relationship Manager

Compliance Officer

Due Diligence Officer

Portfolio Manager

Investment 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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