Document background
The Private Lending Term Sheet is a crucial preliminary document used in South African private lending transactions to establish the fundamental terms of a proposed loan. It serves as a roadmap for the preparation of definitive loan documentation and is typically used when parties have reached an initial understanding but before committing to detailed legal documentation. The document includes essential information such as loan amount, interest rates, repayment terms, security arrangements, and key conditions, all structured within the South African legal framework. While mostly non-binding, it helps prevent misunderstandings and provides a clear framework for negotiation. The term sheet must consider compliance with South African legislation, including the National Credit Act, Consumer Protection Act, and Financial Intelligence Centre Act, particularly regarding interest rate caps, consumer protection, and anti-money laundering requirements.
