Corda•September 29, 2022•By: Divya Taori
A syndicate loan is an arrangement where several financial institutions form a group(syndicate) and lend money to one borrower. It consists of a single loan agreement between the borrower and all the lenders of the syndicate. Each lender will contribute a part of the loan amount and share the lending risk with the other members. Syndicate lending allows lenders to distribute risk and take part in opportunities that would have been too large for their individual capital base or when the total loan amount is outside the scope of the lender’s risk exposure. In a syndicated loan, the borrower could either be a company, a large project or a country’s government.