?? What is Bank Commitment Letter? ??

Reference No.: FE201S156 Date: Sun, Jul 14, 2024

What is Bank Commitment Letter ?

A bank commitment letter is a document issued by a bank or other financial institution that outlines the terms and conditions under which they are willing to provide financing or a loan to a borrower.

Key features of a bank commitment letter include:

? Loan Amount: The specific dollar amount the bank is committing to lend to the borrower.

? Loan Type: The type of financing being provided, such as a term loan, line of credit, mortgage, etc.

? Interest Rate:

The interest rate the borrower will pay on the loan, which may be fixed or variable.

? Loan Term:

The duration over which the borrower has to repay the loan.

? Collateral:

Any assets the borrower is required to pledge as security for the loan.

? Covenants:

Conditions the borrower must adhere to during the loan term, such as financial ratios or limitations on business activities.

? Fees: Any upfront fees the borrower must pay to the bank, such as origination, application, or processing fees.

? Expiration Date:

The date by which the borrower must accept the commitment letter's terms before the offer expires.

The commitment letter serves as a binding agreement between the bank and the borrower, outlining the key parameters of the loan. It provides the borrower with a guarantee of financing, subject to meeting the stated conditions.

Obtaining a bank commitment letter is often a critical step in securing financing for major transactions, such as commercial real estate purchases, business acquisitions, or large capital investments. It demonstrates to other stakeholders that the necessary funding is in place.

The borrower can then use the commitment letter to negotiate other aspects of the transaction, such as purchase agreements or construction contracts. Overall, the commitment letter provides assurance and clarity around the financing terms.

Bank Commitment Letter ( DRAFT )

Date:??????????? ???

To :…..(Client Name Corporation Or Individual)

Account Number:

Account Name :…..(Client Name Corporation Or Individual)

Sub: Bank Commitment Letter?

Dear Sirs,

We, ………….Bank, located at …………………………in ………., hereby confirm with full bank responsibility and with full legal liability, that our client ……(name of account holder)......., holds cash funds on deposit in account number .............. , in our bank for an amount of XXX Thousand Euro or USD ( XXX,000,000.00). We further confirm are good, clean, cleared funds and were generated from legal, non-criminal business activities. We confirm that these funds are owned cleared and free from any liens and encumbrances and the rule of full disclosure confirms these funds as legitimate.

?We further confirm that …..(Client Name Corporation or Individual) is the real owner of the funds and that Mr…………… with Passport Number …xxxx… issued by (Country)…., has been recorded as signatory on the account ??referenced above.

?This Bank Commitment Letter does not represent a credit instrument, may be verified these funds, through the following coordinates:

?Bank Name:

Bank Address:

Account Number:

Account Name:

Swift Code:

Bank Officer:

Telephone Number:

Email Officer:

Fax No:

?

Sincerely,?

?

____________________________ _______________________

Authorized Signature Authorized Signature

Name: ?(Bank Officer’s Name). Name: (Bank Officer’s Name)

Title: Title:

Bank Department : Bank Department :

PIN CODE Number : PIN CODE Number :

????

BANK SEAL

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