A term sheet is a document that outlines the key proposed terms of your facility before the final agreements are completed.
The term sheet typically includes:
Facility amount — The proposed amount of capital available.
Currency — The currency in which the facility will be provided.
Pricing — The proposed interest rate, spread, discount, or other applicable pricing terms.
Collateral — The assets or receivables supporting the facility.
Advance rate — The percentage of eligible assets that may be funded.
Repayment terms — How and when amounts are expected to be repaid.
Facility duration — The proposed term of the facility.
Eligibility criteria — The requirements assets must meet to qualify for funding.
KPIs — Key performance indicators that may be used to monitor the performance of your business, portfolio, or facility.
Reporting requirements — Information you may be required to provide during the facility.
Conditions before activation — Requirements that must be satisfied before the facility can become active.
The term sheet provides an overview of the proposed structure, economics, and key requirements of the facility. Final terms are set out in the applicable facility agreements.