2 min read
Definition
An undrawn margin fee is a form of non-utilisation fee priced as a percentage of the drawn margin — commonly a third to a half. It compensates the lender for reserving the headroom you have not used, and is part of the true cost of a committed facility.
In plain terms
You pay a slice of the margin on money you have not borrowed, as the price of having it ready to draw.
Why it matters for your company
Size committed facilities to real need so the undrawn fee stays small. See non-utilisation fee and commitment fee.
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Contribution margin
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Read →Funding for UK limited companies
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