DEFINITION of 'Standby Note Issuance Facility - SNIF'
A type of credit facility, often a bank, that accepts an arrangement that finances projects via secondary obligations. SNIFs will guarantee payment to the lender if the borrower defaults. In this way, SNIFs ultimately act as a form of insurance for the lender.
BREAKING DOWN 'Standby Note Issuance Facility - SNIF'
SNIFs are used most frequently by weak borrowers of credit that pose a higher risk of default. The borrower pays the SNIF a commission in return for its secondary guarantee. SNIFs are often reported as off-balance sheet items for financial reporting purposes.