Facility

What is a 'Facility'

A facility is a formal financial assistance program offered by a lending institution to help a company that requires operating capital. Types of facilities include overdraft services, deferred payment plans, lines of credit, revolving credit, term loans, letters of credit and swingline loans. A facility is essentially another name for a loan taken out by a company.

BREAKING DOWN 'Facility'

Facilities can be committed, meaning that they specify a precise amount of funds that will be provided, or uncommitted, meaning that the lender has not agreed to provide a specified amount of funding. Different types of facilities are available to meet different business needs, such as seasonal financing and the payment of creditors.

RELATED TERMS
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RELATED FAQS
  1. What are the differences between revolving credit and a line of credit?

    Understand how to differentiate between a line of credit and a revolving credit account, and find out why business owners ... Read Answer >>
  2. What are the differences between revolving credit and installment credit?

    Discover how to distinguish between installment credit loans and revolving credit loans, and learn how they affect your credit ... Read Answer >>
  3. What are some examples of good situations in which to use revolving credit?

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  4. What is the difference between a loan and a line of credit?

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