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Bridge Loan Term Sheet for the United States

Bridge Loan Term Sheet Template for United States

A Bridge Loan Term Sheet is a preliminary document outlining the key terms and conditions of a proposed short-term financing arrangement. Under U.S. jurisdiction, it serves as a foundation for the subsequent detailed loan agreement, typically including terms such as loan amount, interest rate, maturity date, security requirements, and repayment conditions. While generally non-binding (except for certain provisions like confidentiality), it represents the parties' intent and forms the basis for due diligence and final documentation.

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Bridge Loan Term Sheet

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What is a Bridge Loan Term Sheet?

A Bridge Loan Term Sheet is commonly used when companies require interim financing to bridge a temporary gap in funding. This document, governed by U.S. federal and state lending laws, serves as a roadmap for the final loan agreement. It typically becomes necessary during time-sensitive situations such as property acquisitions, merger transactions, or between equity funding rounds. The term sheet outlines essential commercial and legal terms, including loan amount, interest rates, security requirements, and key conditions precedent, while providing flexibility for negotiation before final documentation.

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

1. Borrower/Lender Information: Basic information about the parties involved including legal names, addresses, and contact details

2. Loan Amount and Purpose: Principal amount of the bridge loan and its intended use

3. Interest Rate and Fees: Interest rate, calculation method, and all associated fees including origination fees, commitment fees, and exit fees

4. Term and Maturity: Duration of loan and maturity date, including any extension options

5. Security/Collateral: Description of assets securing the loan and related security arrangements

6. Repayment Terms: Payment schedule, conditions, and mechanics of repayment

7. Conditions Precedent: Conditions that must be satisfied before the loan becomes effective

8. Representations and Warranties: Standard statements of fact that the borrower confirms as true

9. Events of Default: Circumstances that would trigger a default under the loan

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

1. Conversion Rights: Terms and conditions under which the debt may be converted to equity

2. Prepayment Provisions: Terms governing early repayment including any prepayment penalties or incentives

3. Subordination Terms: Provisions regarding the priority of the loan relative to other debt obligations

4. Covenants: Positive and negative commitments required of the borrower during the loan term

5. Change of Control: Provisions dealing with changes in ownership or control of the borrower

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

1. Schedule A - Collateral Schedule: Detailed list and description of all assets securing the loan

2. Schedule B - Payment Schedule: Detailed repayment timeline including payment dates and amounts

3. Schedule C - Use of Proceeds: Detailed breakdown of intended use of loan funds

4. Schedule D - Existing Indebtedness: List of borrower's existing debt obligations and their priority

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

United States

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Clauses

























Industries

Truth in Lending Act (TILA) and Regulation Z: Federal law requiring disclosure of credit terms and standardizing how costs associated with borrowing are calculated and disclosed

Equal Credit Opportunity Act (ECOA): Federal law that prohibits discrimination in lending based on race, color, religion, national origin, sex, marital status, age, or whether applicant receives public assistance

Fair Credit Reporting Act (FCRA): Federal law regulating the collection, dissemination, and use of consumer credit information

Securities Act of 1933: Federal law governing the offer and sale of securities, may apply if the bridge loan could be considered a security

Securities Exchange Act of 1934: Federal law regulating secondary trading of securities and establishing the SEC

Dodd-Frank Act: Comprehensive financial reform legislation affecting lending practices, consumer protection, and financial institutions

State Usury Laws: State-specific laws that set maximum interest rates and regulate lending terms within each jurisdiction

State Lending Licenses: State-specific requirements for obtaining and maintaining lending licenses and related compliance obligations

Blue Sky Laws: State-specific securities laws regulating the offering and sale of securities to protect investors from fraudulent activities

Uniform Commercial Code (UCC): Standardized state laws governing commercial transactions, particularly Article 9 regarding secured transactions

Bankruptcy Code: Federal laws governing bankruptcy proceedings and creditor rights protection

IRS Regulations: Federal tax regulations affecting the treatment of loan interest, fees, and other financial aspects of bridge loans

Bank Secrecy Act: Federal law requiring financial institutions to assist government agencies in detecting and preventing money laundering

CFPB Guidelines: Consumer Financial Protection Bureau guidelines governing consumer lending practices and consumer protection

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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