What is meant by syndicated loan?

Share. A syndicated loan is a substantial loan provided to a large borrower ($1 million or more) by several lenders together. Each lender in the lending group (syndicate) provides part of the total amount and shares part of the lending risk.

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Likewise, people ask, what are the advantages of loan syndication?

Advantages of a Syndicated Loan

  • Less time and effort involved. The borrower is not required to meet all the lenders in the syndicate to negotiate the terms of the loan. …
  • Diversification of loan terms. …
  • Large amount. …
  • Positive reputation.
Similarly, what are the different stages of the syndication process? Broadly there are three stages in syndication, viz., Pre-mandate Stage, Placing the Loan and Disbursement and Post-closure Stage. Pre-mandate Stage: This is the initiated by the prospective borrower.

Just so, what are the features of syndicated loan?

Features of Loan Syndication

  • Large Amount.
  • No separate agreement between an individual bank and the borrower.
  • No ambiguity is used to be there.
  • The Length for the agreement generally uses to between 3 to 15 years.
  • Low risk is found in loan Syndication.
  • Each bank is not necessarily to contribute an equal amount.

What is meant by the term syndication?

1 : an act or instance of forming a syndicate or bringing something under the control of a syndicate real estate syndication. 2a : the act of selling something (such as a newspaper column or television series) for publication or broadcast to multiple newspapers, periodicals, websites, stations, etc.

What is syndication process?

Loan Syndication is the process where a bunch of banks and lenders fund various fragments of a loan of an individual borrower. Thus, a bunch of banks come together to form a syndicate and provide the necessary loan amount to the borrower. …

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