Syndicated loans represent a unique lending structure in which several financial institutions combine their resources in order to mitigate the individual risk associated with major loans.
For borrowers, the primary benefits of a syndicated loan (as opposed to working with several institutional lenders on an individual basis) include flexibility and expediency. Instead of arranging partial loans among several banks and funds, the borrower negotiates a large-scale loan through a single representative institution with syndicate leverage—a streamlined approach that ensures sufficient money remains available for major capital-intensive projects. It also enables the terms and conditions of the loan to be optimally negotiated.
Corporate and government entities consider shortened processing and approval times as additional advantages, made possible because only one loan must be arranged. Benefiting from syndicated loans, clients effectively avoid the lengthy delays associated with underwriting and financing processes that operate through multiple channels.