What Are the Pros and Cons of Term Loans?

International term loan is a short-term and medium-term loan provided by international commercial banks to industrial and commercial enterprises and companies. It is a typical form of international loan.

International term loan

International term loan is a kind of

In addition to statements and guarantees, prerequisites, agreed matters,

Second, European currency loans

Refers to the loan

International Syndicated Loan

Also known as "international Cindy loans", it refers to a group of banks formed by several banks up to dozens of countries to jointly provide long-term huge loans to borrowers.

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In addition to the terms and conditions common to all international financing agreements including statements and guarantees, prerequisites, agreed matters, default events, and credit guarantees, international term loan agreements also include the following main terms.

International term loan loan currency terms

The loan currency in an international term loan is generally a freely convertible currency. Some stipulate a currency, some stipulate several currencies for the borrower to choose, or a package of currency units is used as the valuation standard for the loan currency. Some loan agreements use multiple currencies, each with a certain percentage. The choice of loan currency must comprehensively consider factors such as currency risk, the possibility of capital supply, and the purpose and use of the loan.

International Term Loan Maturity Terms

International term loans are short-term and medium-term loans. The period from the effective date of the loan agreement to the repayment of the principal and interest of the borrower is generally 1-10 years, with a maximum of 15 years.

International Term Loan Amount Terms

It is the sum of the funds provided by the lender under the international term loan agreement. Generally, the longer the loan term, the larger the loan amount.

International term loan loan withdrawal clause

International term loans are generally made in instalments. Loan withdrawal clauses often stipulate the borrower's withdrawal period, the amount of each withdrawal, and the location of the withdrawal. If the lender cannot make a loan or the borrower cannot withdraw the loan, the other party generally can only claim damages, not actual performance. The place where the loan is drawn is generally the country in which the loan currency was issued.

International Term Loan Interest Rate Fee

Lending rates are divided into weekly fixed rates and floating rates. Most international term loans with long maturities use floating rates to calculate interest, and they are regularly adjusted according to changes in market interest rates. Neither the fixed interest rate nor the floating exchange rate shall violate the laws and regulations of the relevant country. The various expenses incurred by the international term loan shall be clearly stipulated in the loan agreement and shall generally be borne by the borrower.

International Term Loan Repayment Clause

Most international term loans are repayable by instalments. Loan agreements need to specify the time and amount of each repayment. Before the specified repayment date, the borrower ~ generally has the right to repay the loan in advance, and should also pay the lender a fund for loss compensation.

International term loan rights and obligations

Lenders can generally transfer their rights to others, unless the loan agreement otherwise stipulates or the transfer will adversely affect the borrower. International term loan agreements generally prohibit borrowers from transferring their rights to a third party without the lender's prior written consent. Both borrowers and lenders may not transfer the obligation to lend or repay without the permission of the other party.

Tax terms for international term loans

All tax matters involved in international term loan exchanges should be stipulated in the loan agreement. Generally, all taxes other than withholding taxes are borne by the borrower.