What is a non-utilisation fee? — Answers

2 min read

On the undrawnWhat it charges

Standby costWhy it exists

Not universalCheck the terms

What it means

On some revolving facilities, the lender charges a small percentage on the part of the limit you have not drawn — a non-utilisation (or commitment) fee — to compensate for holding the funds available. It is separate from the interest you pay on the drawn balance. Many simple facilities do not charge it at all.

What this means for your company

A non-utilisation fee changes the maths of keeping a large standby limit — a facility that looks free when idle may not be. When comparing facilities, ask specifically whether one applies and at what rate, and fold it into the true cost. Where you want genuine standby liquidity, a facility with no non-utilisation fee, like Credicorp Flex, is cheaper to hold.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

Do all facilities charge a non-utilisation fee?

No. Many small-business revolving facilities charge interest only on what you draw, with no fee on the idle portion. Always confirm, because it materially affects the cost of holding standby credit.

Is a non-utilisation fee the same as an arrangement fee?

No. An arrangement fee is a one-off charge to set the facility up; a non-utilisation fee is ongoing, based on the undrawn balance. A facility can have one, both or neither.