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Finance & Banking vocabulary · Loans & Credit

Credit facility

Meaning in finance & banking, with examples

nounCommon term

In finance & banking, credit facility means: An arrangement in which a bank agrees to lend a company up to a set amount, which the company can draw on as needed under agreed terms.

In Turkish: kredi limiti, kredi imkanı, kredi tahsisi

How it is used

The standard term in corporate lending documents. Banks grant, renew, increase or cancel a facility, and the company draws down on it. Facilities can be cash loans, revolving credit facilities (RCF) or non-cash facilities such as letters of guarantee. Bankers often just say 'the facility' or 'limits'.

Example sentences

  1. The credit committee approved a 50 million lira credit facility for the client.

  2. The company has drawn only half of its revolving credit facility.

Common collocations

  • grant a credit facility
  • revolving credit facility
  • draw down a facility
  • facility agreement
  • non-cash facilities
  • credit limitThe maximum amount a bank allows a customer to borrow on a credit card or a credit line.
  • corporate bankingBanking services for large companies, such as loans, cash management, trade finance and foreign exchange.
  • letter of guaranteeA bank's written promise to pay a set amount to a third party if its customer fails to meet an obligation, such as finishing a contract or paying a supplier.
  • covenantA promise in a loan or bond agreement that the borrower will or will not do certain things, such as keeping its debt below a set level.
  • syndicated loanA large loan provided by a group of banks together under one agreement, so that no single bank takes all the risk.

More terms: Loans & Credit

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This page explains English vocabulary for learners. It is not financial advice.