A loan facility (e.g. a credit line or a repo facility) whereby the provider is contractually required to advance funds under specific circumstances. In such a credit facility, the terms and conditions are set by the lending entity in clear format, while the borrower is literally required to adhere to the defined terms. A committed facility is a source of credit that is committed by a lender by means of a loan extended to a borrower. The borrower and lender negotiate specific terms and conditions which, once met by the borrower, obligate the lender to borrow the money.

In other words, if the borrower meets the set conditions precedent to the credit facility agreement, then the lender is obliged to extend the loan (in the intended form, such as a line of credit) to the borrower. The borrower still has the right to terminate, or reduce the amount of, the credit facility at any time, while the lender can only terminate in the sole situation of default by the borrower.

Committed credit facilities may be short-term or even long-term (generally not exceeding 5 years).

As opposed to committed facilities, uncommitted facilities are short-term by nature, and are subject to the discretion of either party or both.