uncommitted credit facility

Uncommitted credit facilities are short-term credit facilities which are subject to the discretion of both the borrower and the lender. That is, the creditor has no obligation to extend credit to the borrower, and the borrower has no obligation to borrow from the facility and can terminate it at any time. Businesses often borrow under uncommitted credit facilities to meet their short-term working capital needs, such as payroll.

Compare: committed credit facility .

[Last reviewed in January of 2025 by the Wex Definitions Team ]

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