committed facility: meaning, definition, pronunciation and examples
C1Formal, Business, Financial
Quick answer
What does “committed facility” mean?
A formal, legally binding agreement from a bank or lender to provide a specific loan amount to a borrower under predefined terms and conditions.
Audio
Pronunciation
Definition
Meaning and Definition
A formal, legally binding agreement from a bank or lender to provide a specific loan amount to a borrower under predefined terms and conditions.
In corporate finance, a loan or line of credit that a bank is obligated to provide, often for a significant project, acquisition, or working capital, with the borrower typically paying a fee to secure the commitment regardless of whether the funds are drawn.
Dialectal Variation
British vs American Usage
Differences
Usage is identical in core meaning. Minor contextual preferences: In the UK, 'facility' might more commonly be followed by 'agreement' (e.g., 'committed facility agreement'), while in the US, 'loan' is sometimes used more explicitly (e.g., 'committed loan facility'). The term 'revolver' is a more common American synonym for a revolving committed facility.
Connotations
Conveys formality, significant financial planning, and corporate-level transactions in both variants.
Frequency
Equally common in UK and US professional financial and corporate contexts; very rare in everyday language.
Grammar
How to Use “committed facility” in a Sentence
The company secured a committed facility [PREP: from/in the amount of/with] [LENDER].The [LENDER] provided a committed facility [PREP: for] [PURPOSE/AMOUNT].Drawdowns are permitted under the committed facility.Vocabulary
Collocations
Examples
Examples of “committed facility” in a Sentence
verb
British English
- The bank has committed to providing the facility.
- They are committing £50 million under the new facility.
American English
- The syndicate committed to the full facility amount.
- We committed the capital via a senior facility.
adverb
British English
- The bank agreed committedly, signing the facility agreement promptly. (Rare)
American English
- They are fully committed to the facility's terms. (Adverbial phrase)
adjective
British English
- The committed amount was substantial.
- They sought committed funding sources.
American English
- The committed capital was secured yesterday.
- We only work with committed lenders.
Usage
Meaning in Context
Business
The board approved negotiations for a £200 million committed facility to fund the expansion.
Academic
The paper examines the impact of committed facility covenants on firm investment behaviour.
Everyday
Not used in everyday conversation; replaced by 'loan' or 'line of credit'.
Technical
The senior secured committed facility bears interest at SOFR + 250 bps and matures in 2030.
Vocabulary
Synonyms of “committed facility”
Strong
Neutral
Weak
Vocabulary
Antonyms of “committed facility”
Watch out
Common Mistakes When Using “committed facility”
- Using 'committed' as a verb here (e.g., 'The bank committed facility' – incorrect).
- Omitting 'committed' and just saying 'facility', which loses the legally binding specificity.
- Misspelling as 'comited facility'.
FAQ
Frequently Asked Questions
A committed facility is a legally binding obligation for the lender to provide funds. An uncommitted facility (like a demand loan) allows the lender to cancel or refuse funding at its discretion.
It is a type of formal loan agreement, but the term is used for larger, often corporate, structured financing with specific legal documentation, frequently involving multiple banks (syndication).
Typically, yes. Borrowers usually pay a commitment fee on the undrawn portion of the facility to compensate the bank for reserving the capital.
Yes, a revolving credit facility (or 'revolver') is a common type of committed facility where the borrower can draw, repay, and redraw funds up to a set limit.
A formal, legally binding agreement from a bank or lender to provide a specific loan amount to a borrower under predefined terms and conditions.
Committed facility is usually formal, business, financial in register.
Committed facility: in British English it is pronounced /kəˌmɪt.ɪd fəˈsɪl.ə.ti/, and in American English it is pronounced /kəˈmɪt̬.ɪd fəˈsɪl.ə.t̬i/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “To have money in the bank (figuratively, related concept)”
- “A line of credit”
Learning
Memory Aids
Mnemonic
Think of a COMMITted relationship: the bank is COMMITted to providing the money (FACILITY), just as in a serious promise.
Conceptual Metaphor
FINANCING IS A BINDING CONTRACT (The facility is not just an option; it is a pledged resource).
Practice
Quiz
What is the key characteristic of a 'committed facility'?