Committed credit facilities are a type of credit facility where the borrower and lender negotiate specific terms which, upon satisfaction by the borrower, obligate the lender to borrow the money. That is, if the borrower meets certain conditions precedent to the credit facility agreement, then the lender must extend a line of credit to the borrower. The borrower can terminate or reduce the credit facility at any time, while the lender can only terminate if the borrower defaults on the credit facility. While committed credit facilities may be short-term, they are generally long-term (usually up to five years).
[Last updated in November of 2021 by the Wex Definitions Team]