loan commitment

Also found in: Legal.

Loan commitment

Assurance by a lender to make money available to a borrower on specific terms in return for a fee.

Loan Commitment

The amount in loans that a bank will make or may be required to make in the near future, but has not yet made. Loan commitments may be open-ended or closed-ended. Suppose a bank approves two loans in a year; one is a revolving line of credit for $50,000 and the other is a business loan for $100,000. One would say that this bank has an open-ended loan commitment of $50,000 (because the principal amount in the loan, when repaid, may be borrowed again) and a closed-ended loan commitment of $100,000 (because once its principal is repaid, it no longer must be committed to that borrower). Banks must disclose their loan commitments.

loan commitment

In real estate,a formal promise by a lender to loan up to a specified amount of money, depending on the appraised value of the collateral, with additional details regarding the interest rate, term of the loan, property on which mortgage will be taken, and a date on which the commitment will expire.

References in periodicals archive ?
Issues have been raised whether commercial banks systematically underprice loan commitments and whether generally accepted accounting principles provide meaningful disclosure of the economics of these commitments.
Certain factors that might cause such a difference include, but are not limited to, the company's failure to close the refinancing as anticipated due to, among other things, (a) the occurrence of a material adverse change in the condition of the property, or (b) the failure of the property's occupancy rates and rents to meet the minimum requirements described in the loan commitment.
assumed Schneider's obligation under the original commitment letter to pay a loan commitment fee or (2) by which Schneider was relieved of its obligation to pay that fee.
The automaker said it concluded a loan commitment with the foreign financing group to meet its fund needs in overseas markets.
At the opening of the recent CGI meeting, the Leader of the Indonesian delegation, namely Coordinating Minister for Economic and Financial Affairs Saleh Afiff, did not hesitate to express his optimism that the CGI's loan commitment for Indonesia for 1997/1998 would not decline, saying that if Japan and the United States reduced their loan commitments, the Worm Bank and the Asian Development Bank would do something to compensate for the reductions.
Nineteen banks joined the syndicated loan facility, which was heavily oversubscribed and led to a corresponding scale-back of loan commitments.
The loan commitment is subject to lender due diligence and loan documentation.
Although nonbank entities, such as securitization pools, hedge funds, insurance companies, and pension funds, owned the smallest share of loan commitments, they owned the largest share (62.
announces it has signed a $10,750,000 loan commitment to refinance its River Oaks apartment community for ten years at an exceptional fixed interest rate of 5.
announces it has signed a $10 million loan commitment to refinance its Highland Park apartment community for ten years at an excellent fixed interest rate of 6.
They can receive a firm loan commitment in as little as five minutes," said Thomas W.
Of the total commitment, one is a $21 million loan commitment from a major investment bank and the other is a $4 million loan commitment from a private mezzanine lender.