What Is Loan Syndication?
Loan syndication is the process where we assist you in arranging finance for your business or your property. Our loan syndication service expert advices you on the ways to obtain higher loan while optimising the ROI on the loans taken. This may include reaching out to the Banks, NBFC’s, Asset reconstruction company and other financial institutions in order to ensure that regardless of your situation, we are there to assist you in raising debt capital.
Process of Loan Syndication
- The process of loan syndication is initiated by the borrower. In the first or pre mandate stage the borrowers contact single lender or invite competitive bids from multiple lenders. Post this; the borrower finalizes the lead bank or arranging bank.
- After the leading bank is appointed, the arranger prepares a document known as Information Memorandum. This document features transaction terms, investment considerations, executive summary, industry overview, list of terms and conditions, financial structure, detailed assessment, strengths and weaknesses and risk litigation.
- As soon as the above step is completed, the arranger then sends out invitations to other banks to participate in the syndication. Once the participating lenders of the syndication are finalized, confidentiality agreement is signed among the participants. Post execution of the confidentiality agreement, loan documentation is sent to the banks for their review and approval.
- Once the loan documentation is completed, loan contract is completed and the loan amount is disbursed.
- The final stage involves monitoring through an escrow account. Escrow account is the account in which the borrower deposits its revenue. It is the role of the agent to ensure the repayment of the loans and the payment of statutory dues is done before making payments towards any third party. Also the agent is also responsible to manage operations of loan facility consistently
Types of Loan we offer
- Term Loan – A term loan is a monetary loan that is repaid in regular payments over a set period of time. Term loans usually last between one and ten years, but may last as long as 30 years in some cases. A term loan usually involves an unfixed interest rate that will add additional balance to be repaid.
- Working Capital Loans – These loans aims to fund the working capital cycle of any business. Various types of working capital financing includes cash credit, overdraft facility, buyers credit, packing credit etc.
- Foreign Currency Loans – The foreign currency denominated loans in India are generated out of the pool of foreign currency funds of the Bank held in FCNR (B) Deposits etc. accounts as permitted by Reserve Bank of India. These Loans are commonly known as FCNR (B) Loans.
- Letter of Credit – Letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. They are Commercial, Export / Import, Transferable and Non-Transferable, Revocable and Irrevocable, Stand-by, Confirmed, and Unconfirmed, Revolving, Back to Back, Red Clause, Green Clause, Sight, Deferred Payment, and Direct Pay LC.
- Project Financing – Long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors
- External Commercial borrowing (ECB) – Refers to the debt shouldered by an eligible entity in India for solely commercial purposes, that has been extended by external sources, i.e. from any recognized entity outside India. These borrowings are expected to conform to norms and conditions put forth by the RBI.
Advantages of Loan Syndication with us
- Personalised services of our experts having experience of raising finance of USD 10 Bn.
- Liaising with institutions – Often dealing with financial institution is a hassle. With our team of experts having good rapport with various financial institution, we make sure that raising the finance is made a cake walk for you.
- Optimized Interest Rates – With our market understanding and our strong relationship with institutions, we make sure that our client is not just raising finance but is also paying the right cost (interest) for the same.
- Understand your business – We have experts from various industry sectors making us competent on understanding your requirements and your business. With our financial expertise, we not just assist or liaise with financial institutions, we help our clients preparing the right documentation and forecasts.