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Business Loan Term Sheet for New Zealand

Business Loan Term Sheet Template for New Zealand

A Business Loan Term Sheet is a preliminary document that outlines the key commercial and legal terms of a proposed business loan facility in New Zealand. It serves as a foundation for the subsequent detailed loan agreement and typically includes essential terms such as loan amount, interest rate, repayment terms, security requirements, and key conditions precedent. While generally non-binding (except for specific provisions like confidentiality), it provides a framework for negotiation and demonstrates the parties' intention to proceed with the loan transaction under New Zealand law and banking practices.

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Business Loan Term Sheet

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What is a Business Loan Term Sheet?

The Business Loan Term Sheet is a crucial preliminary document used in commercial lending transactions in New Zealand. It serves as a roadmap for the proposed loan facility, capturing the essential commercial and legal terms agreed between the lender and borrower before proceeding to detailed loan documentation. This document typically precedes the formal loan agreement and is used during the negotiation phase to ensure all parties have a clear understanding of the key terms. While predominantly non-binding, it demonstrates serious intent and typically contains certain binding provisions such as confidentiality and exclusivity. The term sheet must comply with New Zealand banking regulations and commercial law, including the Credit Contracts and Consumer Finance Act 2003 and the Contract and Commercial Law Act 2017.

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

1. Parties: Details of the Lender and Borrower, including full legal names, company registration numbers, 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 total amount to be provided

5. Purpose: Specified purpose(s) for which the loan proceeds may be used

6. Interest Rate: Interest rate structure, including base rate and margin

7. Term and Repayment: Duration of the loan and repayment schedule

8. Security: Overview of security to be provided by the Borrower

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

10. Fees: All applicable fees including arrangement, commitment, and processing fees

11. Key Covenants: Principal financial and non-financial covenants

12. Events of Default: Summary of key events of default

13. Confidentiality: Binding confidentiality obligations regarding the term sheet

14. Non-Binding Nature: Statement clarifying the non-binding nature of the term sheet (except for specific clauses)

15. Governing Law: Specification of New Zealand law as governing law

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

1. Hedging Requirements: Required where interest rate or currency hedging is necessary

2. Syndication Rights: Include when the lender may want to syndicate the loan

3. Group Structure: Necessary for complex corporate borrower structures

4. Insurance Requirements: Detailed insurance requirements for specific asset types

5. Intercreditor Provisions: Required when there are multiple lenders or existing security holders

6. Material Adverse Change: Specific provisions for market or borrower-specific adverse changes

7. Environmental Compliance: Required for industries with significant environmental impacts

8. Guarantor Requirements: Include when guarantees are part of the security structure

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

1. Schedule 1 - Facility Limits and Pricing: Detailed breakdown of facility amounts, sub-limits, and pricing components

2. Schedule 2 - Security Package Details: Comprehensive list of security items and their key terms

3. Schedule 3 - Financial Covenants Calculations: Detailed formulae for financial covenant calculations

4. Schedule 4 - Drawdown Schedule: Proposed drawdown timeline and conditions

5. Schedule 5 - Required Insurance: Specific insurance requirements and minimum coverage amounts

6. Appendix A - Corporate Structure Chart: Diagram showing the corporate structure of the borrower group

7. Appendix B - Financial Model Summary: Key outputs from the financial model supporting the loan

8. Appendix C - Asset Schedule: Detailed list of assets being provided as security

Authors

Alex Denne

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

Jurisdiction

New Zealand

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions



































Clauses

























Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Retail

Technology

Agriculture

Construction

Healthcare

Hospitality

Transportation and Logistics

Energy

Mining

Professional Services

Education

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Credit

Risk Management

Compliance

Corporate Banking

Commercial Banking

Executive Leadership

Business Development

Investment

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Banker

Relationship Manager

Credit Analyst

Risk Manager

Legal Counsel

Corporate Lawyer

Managing Director

Chief Executive Officer

Financial Controller

Business Development Manager

Commercial Director

Investment Manager

Compliance Officer

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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