Can a term sheet be e‑signed?

Yes. Electronic signatures are enforceable under the federal ESIGN Act (15 U.S.C. §7001) and state UETA laws where adopted, provided intent, consent, attribution, and record retention are satisfied.

Which provisions are binding?

Specify in the document which clauses are intended to be binding (for example, confidentiality or exclusivity). Absent clear language, term sheets are typically non‑binding summaries.

Is notarization required?

Generally no for a simple term sheet, but some jurisdictions or lenders may require notarization or RON for collateral documents or security interests.

What if a field contains an error?

Correct promptly and re‑circulate an amended term sheet. Keep version history and avoid backdating; document corrections in an addendum where necessary.

Who should sign the term sheet?

An authorized officer or agent with signatory authority consistent with corporate governance documents; include printed name and title to verify authority.

How are updates handled after signing?

Amendments should be documented in writing and executed by all parties. Material changes are commonly memorialized in a revised term sheet or amendment signed by the same authorized representatives.

Electronic Signature
Templates
Finance
Financial Term Sheet

Financial Term Sheet

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

FINANCIAL TERM SHEET

Parties

Lender:

Lender Address

Borrower:

Borrower Address

Transaction Summary

Transaction Type: Senior Secured Loan Unsecured Loan Convertible Note Equity

Principal Amount Use of Proceeds (brief)

Pricing and Fees

Interest Rate: Interest Type:

Upfront Fees and Commitment Fees Late Payment / Default Rate

Security, Ranking and Collateral

Proposed Security:

Intercreditor / Subordination (if any)

Repayment Terms

Maturity Date: Amortization / Repayment:

Prepayment / Redemption Provisions

Covenants and Restrictions

Affirmative Covenants Negative Covenants

Conditions Precedent & Closing

Conditions to Funding

Target Closing Date:

Representations & Warranties

Events of Default & Remedies

Fees, Expenses and Taxes

Confidentiality and Binding Effect

The parties agree that this term sheet constitutes a non-binding statement of the principal terms of the proposed transaction, except that the Confidentiality clause and the Exclusivity clause, if checked below, shall be binding and enforceable as set forth herein.

Confidentiality (Mutual and binding) Exclusivity / No-shop (binding)

Governing Law

Governing Law:

Expiration

This term sheet will expire unless accepted by both parties on or before . Any extension must be agreed in writing.

Miscellaneous

Additional Provisions / Notes

The parties acknowledge that this term sheet is intended to summarize the principal commercial terms of the proposed financing. Except as expressly provided otherwise, neither party will be legally bound to consummate the transaction until definitive financing documents have been executed and delivered by the parties. The parties further agree that any binding obligations are limited to those sections so identified as binding.

Lender:

By:

Date:

Borrower:

By:

Date:

What a Financial Term Sheet Is and what it covers

A Financial Term Sheet is a concise, non‑binding document that summarizes the principal economic terms and conditions of a proposed financing or investment. It typically identifies the parties, transaction size, valuation or pricing, security or collateral, key dates, and any material conditions precedent. The term sheet frames later legal documentation (stock purchase agreement, note, loan agreement) and guides due diligence, negotiation, and internal approvals. While often non‑binding overall, certain provisions such as confidentiality, exclusivity, or breakup fees may be enforceable if expressly stated.

Why use a Financial Term Sheet

A term sheet clarifies expectations early, reduces negotiation time, and creates a shared basis for drafting definitive agreements. It helps stakeholders evaluate affordability, structure, and timing before committing legal and administrative resources.

Who prepares and reviews Financial Term Sheets

Use the term sheet as an internal alignment tool and as the roadmap for due diligence and contract drafting.

Investors and lenders: Evaluate pricing, covenants, security, and exit rights in concise form.
Founders and CFOs: Compare offer economics, dilution, repayment terms, and timelines.
Legal and compliance teams: Confirm enforceability, regulatory constraints, and required approvals.

Essential components to include in a professional term sheet

A well structured term sheet groups economic, structural, and procedural items so parties can quickly assess deal feasibility and draft final documents.

Parties

Legal names and entity types of investor(s) and issuer, including any intermediaries or special purpose vehicles involved in the transaction.

Transaction Summary

High‑level description of the transaction type (equity, convertible note, loan), total amount being raised, and any tranche or closing structure.

Economic Terms

Price per share or interest rate, principal amount, valuation cap or pre‑/post‑money valuation, and any discounts or warrants attached to the financing.

Security & Collateral

Whether the obligation is secured, ranking of liens, collateral description, and intercreditor considerations for multiple lenders.

Conditions

Material closing conditions, required approvals, delivery of legal opinions, due diligence items, and regulatory clearances.

Covenants & Restrictions

Affirmative and negative covenants, information rights, board representation, transfer restrictions, and anti‑dilution mechanisms.

Required information and fields at a glance

Party Names: Full legal entity names

Entity Types: LLC, Corporation, Trust, etc.

Transaction Amount: Principal or raise amount

Pricing: Price/share or interest rate

Key Dates: Maturity and closing dates

Governing Law: Selected state law

Stepwise process to complete a Financial Term Sheet

Follow these sequential steps to prepare, circulate, and finalize a term sheet before drafting definitive agreements.

01

Draft core terms: Summarize parties, amount, pricing, and security.
02

Internal review: Finance and legal confirm accuracy and risks.
03

Share with counterparty: Deliver term sheet for counterpart review and comments.
04

Sign and memorialize: Confirm binding vs non‑binding provisions and record date.

Configuring the online workflow for signing and approvals

Set up authentication, routing, and storage before sending the term sheet to reduce signer friction and create an audit trail.

Field	Configuration
Authentication Method	Email link, SMS code, or KBA
Routing Order	Sequential or parallel signer order
Notifications	Automatic reminders and expiration
Archive Location	Cloud folder or CRM record

Where to send or file the completed term sheet

Determine distribution and retention points to ensure deal transparency and support future enforcement or audit needs.

Primary Recipient: Counterparty legal or deal lead
Internal Records: Finance, legal, and executive folders
CRM Entry: Attach to the opportunity or deal record
Secure Archive: Store in document management with audit trail

Digital signing and system integration considerations

Ensure the platform supports retention, export formats, and any industry compliance needs such as HIPAA or 21 CFR Part 11 before finalizing e‑execution workflows.

Authentication: Email, SMS, or KBA options
Integrations: CRM and cloud storage links
Document formats: PDF, DOCX, and editable fields

Common timelines and deadline checkpoints

Track key dates clearly so obligations, exclusivity periods, and due diligence windows do not lapse during negotiations.

Term Sheet Issued:

Date the draft is circulated to counterparties

Offer Expiration:

Deadline for acceptance of the term sheet offer

Due Diligence End:

Final date for completing requested diligence items

Target Closing Date:

Anticipated date for definitive documentation and funding

Post‑Closing Deliverables:

Schedule for filings, opinions, and evidence of lien perfection

Key milestones from term sheet to closing

Sequence these milestones to create a clear path from term sheet agreement to legal close and post‑closing compliance.

01

Term Sheet Execution

Parties sign the term sheet and confirm binding provisions.

02

Due Diligence

Buyers and lenders complete document, financial, and legal reviews.

03

Draft Definitive Agreements

Lawyers prepare purchase agreement, note, or loan documents.

04

Closing and Funding

Deliverables exchanged and funds wired per the agreement.

Common preparation mistakes to avoid

Using ambiguous or placeholder terms for price or amount, which creates downstream disputes during final documentation and closing.
Failing to state which provisions are binding (confidentiality, exclusivity) and which are illustrative or non‑binding.
Omitting the required authorized signer name and title, delaying acceptance and raising questions about signature authority.
Not aligning the term sheet with existing governing documents, leading to contradictory covenants or impossible conditions.

Risks and potential consequences of an incorrect term sheet

Misstated Amount: May void critical financing expectations

Missing Signatures: Can delay closing or challenge enforceability

Conflicting Terms: Creates ambiguities in definitive agreements

Tax Reporting: Incorrect data may trigger IRS penalties

Breach Risks: Binding clauses can expose parties to damages

Assignment Issues: Unauthorized transfers may be unenforceable

eSignature vendor comparison for signing Financial Term Sheets

This concise feature and pricing snapshot highlights baseline plan costs and common capabilities across leading eSignature platforms, with signNow shown first.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7‑day free trial	Trial available	Trial available	Free limited plan	Free limited plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently asked questions about Financial Term Sheets

Practical answers to common legal, signing, and procedural questions encountered when preparing and executing term sheets.

Need help? Contact support

Can a term sheet be e‑signed?
Yes. Electronic signatures are enforceable under the federal ESIGN Act (15 U.S.C. §7001) and state UETA laws where adopted, provided intent, consent, attribution, and record retention are satisfied.
Which provisions are binding?
Specify in the document which clauses are intended to be binding (for example, confidentiality or exclusivity). Absent clear language, term sheets are typically non‑binding summaries.
Is notarization required?
Generally no for a simple term sheet, but some jurisdictions or lenders may require notarization or RON for collateral documents or security interests.
What if a field contains an error?
Correct promptly and re‑circulate an amended term sheet. Keep version history and avoid backdating; document corrections in an addendum where necessary.
Who should sign the term sheet?
An authorized officer or agent with signatory authority consistent with corporate governance documents; include printed name and title to verify authority.
How are updates handled after signing?
Amendments should be documented in writing and executed by all parties. Material changes are commonly memorialized in a revised term sheet or amendment signed by the same authorized representatives.

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