Uncommitted Facility

You know the feeling. You’re in love with the factory, and you know the factory loves you back. However, you just can’t get it to commit. It's an uncommitted facility.

Actually, this one has to do with borrowing money. The "facility" here has to do with money provided by a lender. The idea of an "uncommitted facility" makes most sense when compared to a committed facility. The committed facility is one where the terms of the loan detail how the money can be used. The money is meant for a specific purpose.

Meanwhile, an uncommitted facility is more flexible. The money can be used for whatever a company needs. It provides a kind of backstop for times when revenue falls short of expenses.

Think of it like the difference between a mortgage and line of credit. You have to use money you got in a mortgage to buy a house. The cash just isn’t yours to do with as you please, even if you pay it back. A line of credit, meanwhile, gives you more freedom. The bank doesn’t tell you what to use the money for.