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Home > QFINANCE Dictionary > Definition of commitment fee

Definition of

commitment fee

Finance

payment to fix interest rate on forthcoming loan a fee that a lender charges to guarantee a rate of interest on a loan a borrower is soon to make.

Related definitions of "commitment fee"

commitment fee - Related Articles

  • Investing in Structured Finance Products in the Debt Money Markets

    Best Practice

    The standing fee is a function of the credit quality of the borrower. A recent development, widely used by ABCP vehicles, has been the replacement of part or all of the liquidity line with a “committed repo” facility (or committed TRS facility), which carries with it a lower fee and thus saves
    By Moorad Choudhry

  • Equity Issues by Listed Companies: Rights Issues and Other Methods

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    The total cost of a firm-commitment offer in the United States is, on average, 7% of the amount raised, ignoring any discount. The cost of a rights issue or open offer in the United Kingdom is 6% on average. Much the largest components of the cost are the fees to the lead bank
    By Seth Armitage

  • Venture Capital Funds as an Alternative Class of Investment

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    contingent on investment success. The central character in a venture fund is the general partner (GP), who establishes a fund by seeking a financial commitment from various investors, who are referred to as limited partners (LPs). The GP’s compensation takes the form of a management fee, defined as a
    By Michael D. McKenzie, Bill Janeway

  • Financial Techniques for Building Customer Loyalty

    Best Practice

    The seller commits to buying back the good or refunding fees for a service delivered if the good or service doesn’t meet the performance standards established at the time of the sale. During its formative years Domino’s Pizza grew in large part through loyal customers retained by its promise “pizza
    By Ray Halagera

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Definitions of ’commitment fee’ and meaning of ’commitment fee’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’commitment fee’ and other financial terms with our online QFINANCE Financial Dictionary.

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