Uncommitted facility

An uncommitted facility can offer a convenient source of short-term finance, but the lender may decline a drawdown in the circumstances set out in the agreement. Its availability is therefore less certain than a committed facility, whose lender commitment is also subject to contractual conditions, covenants and expiry. Review pricing, fees, security, notice and renewal terms. Treasury should avoid treating a discretionary line as cash already held or unconditional contingency funding, particularly when a funding need may coincide with deteriorating credit conditions.