Term Loans Flashcards
1
Q
What are Term Loans Used For
A
Finance non-current assets
Finance change in ownership
Carryover debt
2
Q
Term loan Documentation
A
Use a term loan agreement
Extract the max ACF and repay loan as fast as possible
Include excess cash recapture requirement
Require most frequent repayment possible
Make sure term does not extend past the life of the asset
Personal guarantees
3
Q
Term Loan Covenants
A
Maintenance Insurance Min net worth No other borrowings Min debt service coverage cash flow preservation
