Bilateral, syndicated, club arrangements

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 guidance note explains the key features of bilateral loans, syndicated loans and club loans.

See Bilateral, syndicated, club arrangements.

Secured and guaranteed facilities

A lender's primary concern is that it is repaid. If a borrower is unable to repay the loan or becomes insolvent, the lender may have to share the borrower's available assets with other creditors and only receive part of what it is owed as a result. Where security is provided, the lender receives an interest in the security provider's asset(s) giving it comfort that it will hopefully be able to recover amounts from the borrower in the event of the borrower's insolvency.

This guidance note looks at the considerations for both the lender and borrower when deciding whether or not security is required for a loan and considers some aspects of taking security in respect of the Personal Property Securities Act 2009 (Cth) (PPSA). It examines guarantees and indemnities, which before the PPSA were viewed as quasi security.

This guidance note also discusses how the “ipso facto” regime affects a lender’s rights to accelerate a loan, enforce its security or call on a guarantee upon the insolvency of the borrower, and outlines certain exemptions to the statutory stay on enforcing “ipso facto” clauses including the exemption for syndicated loans.

See Secured and guaranteed facilities.

Overdrafts, term loans and revolving credit facilities

The three common types of loan facility are:

• • overdrafts;
• • term loans; and
• • revolving credit facilities (RCFs).

This guidance note outlines the features of the loan facilities and considers the advantages and disadvantages of each type of loan facility from a borrower's perspective.

See Overdrafts, term loans and revolving credit facilities.