An advance commitment is a promise to take specific action at a future date with predefined terms. It's commonly used in real estate to secure financing for projects, often before completion. Understanding different types of advance commitments can be crucial for developers and investors.
A commitment made by a lender to make a sum of money available at specified terms for a specified period, subject to the payment of a standby fee by the borrower.
A Standby Fee is a sum required by a lender to provide a Standby Commitment. The fee is forfeited if the loan is not closed within a specified time.
