Term sheet

A term sheet is a short, usually non-binding document setting out the key commercial terms of a proposed financing or transaction — amount, structure, pricing, security, conditions and timetable — before full legal documentation is drafted. It frames negotiations and confirms intent.

Issued in debt, equity and M&A processes.

Both set out the key terms of a proposed deal before full legal documentation. A term sheet is used across debt, equity and M&A processes to frame amount, structure, pricing, security and timetable, while a letter of intent is typically issued by a buyer or investor and often introduces exclusivity for the next stage.

A term sheet is usually non-binding on its main commercial terms — it confirms intent and frames negotiation rather than creating an obligation to complete. Certain provisions, such as confidentiality, exclusivity or costs, may be expressed to be binding, so parties should be clear which clauses take effect immediately.