A syndicated loan is a large loan provided by a group of lenders who each contribute a portion of the funds and share the lending risk.
For example, a commercial real estate developer secures a $12 million syndicated loan from a group of three lenders — each contributing $4 million — reducing any single lender's exposure while still allowing the borrower to access the full financing needed for a large mixed-use development.
Why it matters: It allows massive corporations to borrow billions by spreading the immense risk across a consortium of banks.
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