Loan syndication most often occurs in situations where a borrower requires a large sum of capital that may either be too much for a single lender to provide, or may be outside the scope of a lender’s risk exposure levels. Thus, multiple lenders will work together to provide the borrower with the capital needed, at an appropriate rate agreed upon by all the lenders. In a syndication deal, the client has to maintain relationship only with the lead arranger, instead of a number of financial institutions, thus making the process more simple and efficient.
The whole process is usually accomplished within 3-6 months. However, this may show a discrepancy based on the difficulty of the deal.
- Usually for a term of 1 to 5 years.
- Repayment through monthly or quarterly rentals.