General

The moment a sponsor receives indicative terms is sometimes treated as the moment the financing is done. The leverage is there, the pricing works, and the model finally closes. In practice, that document is often the starting point of the process. The facility that reaches credit committee and is eventually signed tends to be smaller, carry more conditions and sometimes cost more. The sponsor who budgeted on the headline figure finds out in due diligence, when changing course is most expensive.

This happens for structural reasons. Indicative terms are usually written by the origination side, from a summary, before the lender has instructed its own valuation or read the full file. The originator's job is to win the mandate, so the terms describe what the lender could do if everything checks out. Credit approves on what the file actually shows. Most of the gap between those two positions sits in one phrase that appears throughout every term sheet: subject to.

What moves between indicative and approved is fairly predictable. Leverage is the first to go. The lender's valuer comes in below the sponsor's, or the loan-to-cost is measured against the lender's view of cost rather than the sponsor's budget, and...

Ask a sponsor how their financing process is going and you will often hear that several parties are interested. Press on what interested means and it usually resolves into something softer: a call that went well, a request to keep them posted, a promise to come back after the summer. Very few of those conversations produce a term sheet. Almost none of them produce a clear no. That gap, between the volume of maybes and the scarcity of decisions, is where most financing processes quietly fail.

Lenders rarely decline outright, and the reason is structural rather than personal. A no costs something. It closes a relationship with an introducer, gives up the option to look again if the deal improves or the credit box moves, and requires the person delivering it to defend a view internally. Silence costs nothing. So the default output of a credit team that is not convinced is not rejection. It is deferral, expressed politely and often with genuine warmth. The sponsor hears encouragement. The lender has recorded a pass.

Not every maybe is the same, and the distinction matters more than the tone of the email. There are broadly three. The first is a timing...