Bilateral Financing Agreement

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The main difference between a syndicated loan and a bilateral loan is the number of parties to the transaction. A bilateral loan can only consist of two parts, while a syndicated loan includes several lenders. In the context of a syndicated loan, the main players in the transaction are the senior manager, the underwriter, the Bookrunner and the agent. In the case of a bilateral loan, the only two parties are the lender and the borrower. Instead of multiple lenders, the borrower acts directly with the bank and saves money by not needing to hire people to look for the financing lender. These loans are not that expensive for the borrower, as the lender does not take any major risk. Since credit is not that complex, credit terms can be clearly defined by the lender. This is another reason why loans are cheaper. A bilateral loan is a loan in which a single lender participates.

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