Glossary

Drawdown and interest

Drawdown is taking money from an agreed facility — and interest usually begins from the drawdown date, not from when the facility was arranged.

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Take the fundsFrom the facility

Interest startsOn drawdown

Definition

Drawdown is the point at which you actually take money from a loan or committed facility. On most facilities, interest accrues from the drawdown date, so an undrawn facility costs only any non-utilisation fee, not interest. Staged facilities allow multiple drawdowns as a project progresses.

In plain terms

Agreeing a facility is not the same as switching on the interest clock — that starts when you draw the money.

Why it matters for your company

Draw only when you need the funds so interest starts as late as possible. See non-utilisation fee and revolving facility interest.

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