When a bank, investment bank, or private credit lender is approached about a potential loan, the process looks something like this. An RFP or request for a proposal is sent out often outlining the deal or transaction as well as the desired funding amount. The credit analyst will determine the underlying risk of the company and the deal. The bankers will propose a structure for the deal and send back an indicative term sheet to the sponsor or client. If the term sheet is accepted, the bank has won the mandate and can prepare the underwriting. The credit memo is an internal document drafted to present the case for putting the bank or credit funds balance sheet at risk to take on the loan. Regardless of whether this is a term loan A or B, the bank has to take the initial risk of underwriting the loan before selling down the exposure. If the credit committee okays the loan, the bank will then shift towards syndication, which is marketing the loan to other banks or institutions. As many loans now trade like bonds in the market, the final pricing is set as the deal goes to market. At this time, the other banks step up to take their pro rata allotments or institutions step up to invest in the loans.