Draw Down
In finance and lending, the term "draw down" refers to the process of accessing or utilizing a portion of a loan or credit facility. When a borrower draws down a loan, they are withdrawing funds from the available credit or loan amount for use in their operations, projects, or other financial needs.
The term is often associated with loans that allow for partial withdrawals or multiple draws over time, such as lines of credit, or term loans with multiple disbursements. The borrower can draw down funds at various intervals based on their cash flow requirements.
The total amount that has been drawn down from a credit facility is referred to as the drawn amount. This amount is subject to interest payments, while any undrawn amount typically does not incur interest until it is accessed by the borrower.
Financial Glossary
Use Lighter Capital's glossary to understand common terms used in finance and investing, so you can build financial literacy and make informed decisions for your startup.
Draw Down
In finance and lending, the term "draw down" refers to the process of accessing or utilizing a portion of a loan or credit facility. When a borrower draws down a loan, they are withdrawing funds from the available credit or loan amount for use in their operations, projects, or other financial needs.
The term is often associated with loans that allow for partial withdrawals or multiple draws over time, such as lines of credit, or term loans with multiple disbursements. The borrower can draw down funds at various intervals based on their cash flow requirements.
The total amount that has been drawn down from a credit facility is referred to as the drawn amount. This amount is subject to interest payments, while any undrawn amount typically does not incur interest until it is accessed by the borrower.
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