Syndicated loan
What is a syndicated loan, and why do banks share deals?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
// THE SHORT ANSWER
A syndicated loan is a single facility funded by a group of lenders on identical terms, arranged by one or a few banks, documented once and administered by an agent. Banks share deals that are too large for one balance sheet, or for one bank's limit on a single name. A bank holding a share works from the arranger's information rather than its own diligence, and votes on waivers alongside lenders whose appetite differs from its own, so its view counts only as far as it persuades the others.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
// WORKED IN
// NEXT TO IT
- Working capital facility
- Multi-currency facility
- Clean-down
- Self-liquidating
- Balloon payment
- Amortisation
- Hardcore (overdraft)
- Term-out
- Club facility
- Unsecured lending
- Cash sweep
- Finance lease
- Drawdown
- Interest-only period
- Tenor
- Utilisation
- Bullet repayment
- Seasonal facility
- Maturity extension (amend and extend)
- Mezzanine finance
- Refinancing risk
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