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Definition
A commitment fee is charged for a lender’s promise to advance funds up to an agreed limit, reflecting the cost of reserving capital. It overlaps with the non-utilisation fee but can also apply to committed term facilities before drawdown. It is part of the total cost of credit.
In plain terms
You are paying for a guarantee that the money will be there when you call on it — certainty has a price.
Why it matters for your company
Weigh a commitment fee against the value of guaranteed access to funds. See arrangement fee and total cost of credit.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
Related reading
Non-utilisation fee
A non-utilisation fee is a small charge on the undrawn part of a committed facility, paying the lender to…
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Arrangement fee
An arrangement fee is a one-off charge a lender makes for setting up a loan or facility — often a percentage…
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Total cost of credit
The total cost of credit is everything you pay to borrow money over and above the amount you receive:…
Read →Non-Utilisation Fee (Commitment Fee) — Business Finance Glossary
A non-utilisation fee — also called a commitment fee — is charged on the undrawn balance of a committed…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.