Glossary · Real estate finance
Term Sheets: Content, Binding Effect and Negotiation
The term sheet is the moment of truth of every financing request: Here, for the first time, conditions, conditions and structure are in black and white.
Last updated: 18 July 2026 · Reviewed by Jürgen Kronawitter
What is in a term sheet?
- Structure: Loan type (e.g. loan type) B. Senior loans, Whole loans, mezzanines, volume, LTV/LTC, maturity, repayment logic.
- Pricing: Margin or interest rate, commitment interest, arrangement and exit fees, if applicable. Equity kicker.
- collateral: Land charge and rank, share pledging, guarantees, account pledgings.
- Conditions: Covenants, Conditions Precedent, Reporting.
- Process: Exclusivity, assumption of costs, period of validity, reservation of committees.
How binding is a term sheet?
Indicative term sheets are subject to review and committee reservations – they are a declaration of intent, not a credit agreement. It becomes more binding with a “Committed Term Sheet” after credit decision. However, individual clauses (exclusivity, confidentiality, reimbursement of costs) are often expressly binding. Important for practice: Details can shift between term sheet and contract documentation – those who fix the critical points (covenants, fees, CP catalogue) early on avoid late surprises.
Compare term sheets: the real leverage
A single term sheet is a number without context. Only the comparison of several parallel offers shows what the market really prices for a project – and creates the negotiating position to improve margin, leverage and circulation. This is exactly how we work: preparing inquiry in a capital market-ready manner, addressing suitable lenders in parallel, comparing term sheets in a structured manner, accompanying fine negotiation until disbursement – within the framework of Debt advisory and all Financing services.
Frequently asked questions
Term Sheet – briefly answered
Is a term sheet legally binding?
As a rule, not – it is indicative and is subject to review and committee reservation. However, individual clauses such as exclusivity, confidentiality or reimbursement of costs are often explicitly agreed on.
How long does it take from the term sheet to the payout?
Depending on the complexity and completeness of the documents a few weeks to a few months: Loan decision, contract documentation, fulfillment of the payment requirements (CPs) and mortgage order determine the cycle.
What should I pay particular attention to in the term sheet?
On the overall package instead of just the margin: covenants and their legal consequences, fees, commitment interest, CP catalogue, exclusivity clauses and the duration of the offer.
Further reading
Related terms and services
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About the author
Jürgen Kronawitter
Jürgen Kronawitter specialises in structured real estate finance. He helps property investors, developers and portfolio owners implement complex financing solutions. His work focuses on structuring and arranging senior loans, whole loans, mezzanine capital and bridge loans, as well as tailored financing for acquisitions, investment properties, developments and refinancing.