The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:
One of the features used to categorise loans is the number of lenders involved. A loan involving one lender is known as a 'bilateral loan'. A loan involving more than one lender may be a 'syndicated loan' or a 'club loan'. Multiple lenders can also be indirectly involved in the same loan by way of sub-participation.
This Practice Note explains the key features of bilateral loans, syndicated loans and club loans.
A bilateral loan is a loan involving a single lender. There may be a single borrower or multiple obligors involved, ie the borrower and other companies in the borrower's group as guarantors and/or security providers.
Bilateral loans are normally used for loans of relatively small amounts and where less complex financing arrangements are required (eg a simple overdraft or term loan). Where the borrower requires a large loan, a single lender may be unwilling or unable to advance the full amount required by the borrower. In these cases, a syndicated or club loan may be a better option.
A syndicated loan is one in which two or more lenders (often many more lenders) join together to provide funding to a borrower or group of borrowers. The terms of this arrangement will be shared by all parties. As such, each party will execute a single facility
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234