Luottositoumuksia

Luottositoumukset, often translated as credit commitments or loan commitments, are legally binding agreements between a lender and a borrower. In essence, the lender agrees to provide a specific amount of credit to the borrower under agreed-upon terms and conditions within a defined period. This commitment assures the borrower that funds will be available when needed, which is crucial for planning significant expenditures such as business expansions, real estate purchases, or managing working capital.

These commitments typically outline the maximum amount of funds available, the interest rate, the repayment schedule, any collateral required, and any covenants or conditions the borrower must meet. Covenants can include maintaining certain financial ratios, providing regular financial statements, or refraining from specific business actions. If the borrower fails to meet these conditions, the lender may have the right to withdraw the commitment or even demand immediate repayment.

Luottositoumukset are common in various financial contexts, including corporate finance, project finance, and personal lending, particularly for large or complex transactions. They provide certainty for the borrower and allow lenders to manage their own liquidity and risk exposure by reserving funds for future lending. The commitment fee, a small percentage of the un-drawn amount, is often charged by the lender for making this promise of funds.