Businesses interested in long-term growth should take advantage of issuer-friendly loan market conditions and prepare for whatever lies ahead. This may require a culture change for finance teams accustomed to a nearsighted approach to capital requirements.
Push your teams to ask new questions - not just "Is there enough capital?" But - "Is it efficient?" "Is it flexible?" Loan syndications, generally an option for deals of more than $40 million, are an effective source of stable capital for larger companies with a benefit anchored in growth-oriented solutions. A syndicated loan brings together multiple lenders on one credit facility, typically when the need for debt financing exceeds the capacity of a single bank.
An experienced lead arranger like FNB constantly evaluates the market to ensure the best terms and results.
In good times, that may mean increasing a revolving line of credit or obtaining a term loan to allow for expansion, providing counsel or adjusting the credit structure, including participating banks.
Instead of battling multiple credit facilities with varied covenants, pricing and maturity dates, a syndicated structure is simplified into one document with common terms and conditions.
Establishing a credit relationship with multiple institutions at once opens access to the full breadth of solutions and expertise available across all the participating financial institutions. You may fill gaps in your banking platform or add sophisticated services your business needs to expand with International Banking Services or Treasury Management products.
A syndication can help you mitigate and diversify risk through the next cycle because you are not relying on a single institution. In a downturn or other business hardship, you are bolstered by the broader support of the full bank group working together to drive solutions.
