A committed line of credit:
guarantees that a set amount of funds will be available to a firm for a stated period of time regardless of events that might occur during that time period.
is a guarantee that a bank will purchase a firm’s accounts receivable at full value.
provides greater assurance than a non-committed credit line that funds will be available when needed by a firm.
guarantees that any funds borrowed during a stated period of time will be charged the lowest rate of interest the lending bank offers to any of its customers.
is a loan arrangement for a stated period of time which is free of all costs and fees other than the actual interest paid on the funds borrowed.