Document background
The Commercial Loan Term Sheet is a crucial preliminary document used in Hong Kong's commercial lending landscape to establish the fundamental terms and conditions of a proposed loan facility. It represents the initial stage of loan documentation, typically issued after initial commercial discussions but before detailed legal documentation. The term sheet captures key commercial terms including facility amount, pricing, tenure, security package, and major conditions, serving as a blueprint for the subsequent detailed facility agreement. While primarily governed by Hong Kong law and banking regulations, it often incorporates international banking practices and standards. The document is essential for both parties to align their understanding of the proposed transaction terms and forms the basis for instructing legal counsel to prepare detailed documentation. Term sheets are particularly important in complex financing transactions where multiple parties need to reach preliminary agreement on key terms before committing resources to full documentation.
