Facility: Definition, Loan Types, and Examples

What Is a Facility? A facility is a formal financial assistance program offered by a lending institution to help a company that requires operating capital. Types of facilities include overdraft services, deferred payment plans, lines of credit (LOC), revolving credit, term loans, letters of credit, and swingline loans. A facility is essentially another name for a loan taken out by a company.Key TakeawaysFacilities are financial assistance programs offered by banks and lending institutions to help companies.The main types of facilities are overdraft services, business lines of credit, term loans, and letters of credit.A facility is essentially another name for a loan taken out by a company. How a Facility Works A facility is an agreement between a company and a public or private lender that allows the business to borrow a particular amount of money for different purposes for a short period of time. The loan is for a set amount and does not require collateral. The borrower often makes mo...