Uncommitted Facility

Uncommitted Facility

An agreement between a bank and a company or, rarely, an individual to provide an unspecified amount in loans on demand from the borrower. The borrower is under no obligation to actually take out a loan at any particular time. Funds borrowed are not repaid on any particular schedule, but they must be repaid on demand from the bank. This agreement is fairly common in situations where a business must make payroll but does not always have the operating income to do so. See also: Committed facility, Line of credit, Overdraft facility.
References in periodicals archive ?
Description : The project is the first utilization under the US$400 million uncommitted facility Scaling Up Capital Markets Solution for Financing Energy Efficiency in LAC (RG-X1250).
Since a supplier finance facility for discounting account payables is legally an uncommitted facility based on the Buyer's irrevocable payment instructions, the Buyers and Suppliers want relationship banks to be involved to ensure continuity of their business and availability of bank finance irrespective of the market conditions.
2bn uncommitted facility that will mature on November 14, 2008.
Project Description : Under a joint programme between the European Investment Bank (EIB) and IDB to support companies seeking overseas expansion, IDB will provide an uncommitted facility of up to US$250 million in the form of A Loans, together with mobilization efforts to provide an additional amount of up to US$250 million, for a total of up to US$500 million to finance eligible financial intermediaries.