Document background
The Loan Agreement Term Sheet is a crucial preliminary document used in Nigerian lending transactions to establish the fundamental terms of a proposed loan facility. It serves as a roadmap for the preparation of the final loan documentation and is typically used during the initial stages of loan negotiations. The document reflects Nigerian banking regulations, financial services requirements, and market practice, incorporating essential elements required by the Central Bank of Nigeria and other regulatory authorities. While generally non-binding (except for specific clauses like confidentiality), it forms the basis for the lender's credit approval process and the borrower's internal approvals. The term sheet captures key commercial terms, conditions precedent, and security requirements, enabling parties to reach preliminary agreement before incurring the cost and time of preparing full facility documentation.
