Commitment fee clause: Copy, customize, and use instantly
Introduction
A commitment fee clause outlines the fee charged by a lender or service provider to a borrower or client for the commitment to provide funds, services, or resources over a specified period. This fee is typically non-refundable and is charged regardless of whether the borrower or client fully utilizes the committed resources. The commitment fee is an essential part of agreements where resources are reserved for the client, and it compensates the service provider for the opportunity cost associated with reserving those resources.
Below are templates for commitment fee clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard commitment fee clause
This version applies a straightforward commitment fee.
The Borrower agrees to pay the Lender a commitment fee of [percentage]% of the total committed amount per annum. The fee will be calculated based on the total unutilized portion of the committed amount and will be payable in quarterly installments on [specified dates].
Commitment fee clause with tiered fee structure
This version applies a tiered structure based on the amount of the commitment.
The Borrower agrees to pay a commitment fee on the unutilized portion of the committed amount, calculated as follows:[Percentage]% for amounts up to [specified amount].[Higher percentage]% for amounts exceeding [specified amount]. The fee will be due quarterly and is non-refundable.
Commitment fee clause with fee based on available but undrawn funds
This version applies the commitment fee to undrawn funds.
The Borrower will pay a commitment fee of [percentage]% per annum on the undrawn portion of the committed funds. The fee will be calculated on a monthly basis and will be payable within [number] days after the end of each month.
Commitment fee clause with a one-time fee
This version includes a one-time commitment fee at the start of the agreement.
The Borrower agrees to pay a one-time commitment fee of [specified amount] to the Lender upon execution of this Agreement. This fee is non-refundable and covers the commitment to provide the total committed amount over the term of the agreement.
Commitment fee clause with penalty for late payment
This version imposes a penalty for late payment of the commitment fee.
The Borrower agrees to pay the commitment fee of [percentage]% per annum on the unutilized portion of the committed amount, payable on [specified dates]. If the commitment fee is not paid by the due date, a late fee of [specified amount or percentage] will be assessed for each [time period] the fee remains unpaid.
Commitment fee clause with early termination provision
This version applies if the agreement is terminated early.
In the event of early termination of this Agreement, the Borrower shall pay a pro-rated commitment fee based on the portion of the commitment utilized at the time of termination. The pro-rated fee will be calculated as [percentage]% of the unutilized commitment, payable within [number] days of termination.
Commitment fee clause with fee waiver under certain conditions
This version provides a waiver for the commitment fee under specific conditions.
The Borrower will be charged a commitment fee of [percentage]% per annum on the undrawn portion of the committed amount, payable quarterly. However, if the Borrower draws at least [specified amount] within [specified time period], the commitment fee for the next quarter will be waived.
Commitment fee clause with fee based on duration of commitment
This version applies a fee based on the duration of the commitment.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the total committed amount for the duration of this Agreement. The fee will be calculated monthly and will be payable on the [specified date] of each month during the term of the agreement.
Commitment fee clause with fee adjustment based on utilization
This version adjusts the commitment fee based on the amount of commitment utilized.
The Borrower agrees to pay a commitment fee on the unutilized portion of the committed amount, calculated as follows:[Percentage]% for unused amounts greater than [specified amount].[Lower percentage]% for unused amounts less than or equal to [specified amount]. The fee will be payable quarterly based on the average unutilized balance over the previous quarter.
Commitment fee clause with refund for early drawdown
This version provides a refund of the commitment fee if the Borrower draws the funds early.
If the Borrower draws down the entire committed amount within [specified time period] from the commencement of this Agreement, the Borrower will be entitled to a refund of [specified percentage]% of the commitment fee previously paid, calculated on the undrawn amount at the time of the drawdown.
Commitment fee clause with separate commitment fee for each tranche
This version applies a commitment fee to each tranche of funds.
The Borrower agrees to pay a commitment fee on each tranche of committed funds, calculated as [percentage]% per annum on the unutilized portion of each tranche. The fee for each tranche will be payable quarterly based on the outstanding balance of the tranche.
Commitment fee clause with fixed minimum fee
This version sets a fixed minimum fee for the commitment.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the unutilized portion of the committed amount, with a minimum fee of [specified amount] per annum. The fee will be due on [specified date] each year, regardless of the unutilized balance.
Commitment fee clause with fee based on quarterly balance
This version calculates the commitment fee based on the quarterly balance.
The Borrower will pay a commitment fee of [percentage]% on the unutilized portion of the total committed amount, calculated based on the quarterly balance. The fee will be paid within [number] days after the end of each calendar quarter.
Commitment fee clause with fee for additional commitments
This version includes a fee for additional commitments.
In the event that the Borrower requests additional commitments beyond the original agreed amount, the Borrower shall pay an additional commitment fee of [percentage]% on the new total commitment. The additional fee will be due quarterly, starting from the date of the increase.
Commitment fee clause with deferred payment option
This version allows for deferred payment of the commitment fee.
The Borrower may defer payment of the commitment fee for up to [specified time period], with the total fee payable in full on [specified date]. Interest at [interest rate]% per annum will be charged on any deferred payments from the date they were due.
Commitment fee clause with fee for multiple loan facilities
This version applies the commitment fee to multiple loan facilities.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the unutilized portion of each loan facility provided under this Agreement. The fee will be paid quarterly, based on the available but undrawn balance of each facility.
Commitment fee clause with higher fee for larger commitments
This version applies a higher commitment fee for larger commitments.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the unutilized portion of the committed amount up to [specified amount], and [higher percentage]% for any amount exceeding [specified amount]. The fee will be payable within [number] days after the end of each quarter.
Commitment fee clause with refundable commitment fee on utilization
This version includes a refundable fee if the Borrower utilizes the full commitment.
If the Borrower draws down the full committed amount within [specified period] from the execution of this Agreement, the Borrower will be entitled to a refund of [percentage]% of the commitment fee paid on the unutilized portion, provided the full commitment is drawn before the end of the agreed period.
Commitment fee clause with pro-rata fee for partial drawdown
This version applies a pro-rata commitment fee for partial drawdowns.
If the Borrower only partially draws on the committed amount, the commitment fee will be calculated pro-rata based on the portion drawn. The fee will be due within [number] days after each partial drawdown and will be based on the remaining undrawn portion of the commitment.
Commitment fee clause with automatic renewal of commitment
This version applies the commitment fee for automatically renewing commitments.
If this Agreement automatically renews for subsequent periods, the Borrower agrees to continue paying the commitment fee of [percentage]% per annum on the unutilized portion of the committed amount, payable on the [specified date] of each renewal period.
Commitment fee clause with early termination charge
This version imposes a fee in the case of early termination.
In the event of early termination of this Agreement, the Borrower agrees to pay a termination fee of [specified amount] or [percentage]% of the unutilized commitment, whichever is higher. The fee will be due immediately upon termination.
Commitment fee clause with time-based reduction
This version reduces the commitment fee based on time elapsed.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the unutilized portion of the committed amount. However, after [specified number] months, the commitment fee will decrease to [lower percentage]% per annum.
Commitment fee clause with fee for unused funds
This version charges a fee for unused funds.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the unused portion of the committed funds. The fee will be assessed monthly and payable within [number] days after each month’s end.
Commitment fee clause with fee for partial commitment
This version applies a fee based on partial commitment.
If only part of the total committed amount is utilized, the Borrower will pay a commitment fee of [percentage]% per annum on the unutilized portion, with a minimum fee of [specified amount]. The fee is due within [number] days after each quarter.
Commitment fee clause with fee for extended commitment period
This version charges a higher fee for extended commitment periods.
If the commitment period is extended beyond the initial term, the Borrower will pay a commitment fee of [percentage]% per annum on the unutilized portion of the commitment. This fee will increase by [percentage]% for each additional [time period] of commitment.
Commitment fee clause with fee for delayed drawdown
This version applies a fee for delayed drawdowns.
The Borrower agrees to pay a commitment fee of [percentage]% on the unutilized portion of the committed amount, with an additional fee of [specified amount] for each month the Borrower delays the drawdown beyond [specified period].
Commitment fee clause with pro-rated fee for early cancellation
This version calculates a pro-rated fee for early cancellation of the commitment.
If the Borrower cancels the commitment before the agreed expiration date, the Borrower will pay a pro-rated commitment fee based on the unutilized portion. The fee will be calculated for the period up to the cancellation date and payable immediately.
Commitment fee clause with performance-based fee adjustment
This version ties the commitment fee to performance metrics.
The commitment fee of [percentage]% will be reduced by [specified percentage]% if the Borrower meets performance targets, including [specified performance metric]. If the targets are not met, the fee will increase by [specified percentage]% per quarter.
Commitment fee clause with full commitment requirement
This version requires the full commitment to be utilized for the fee to apply.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the full committed amount. However, the fee will only be due if at least [specified percentage]% of the commitment is utilized within [specified time period].
Commitment fee clause with fixed upfront payment
This version includes a fixed upfront fee.
The Borrower shall pay a non-refundable commitment fee of [specified amount] upon the execution of this Agreement. This fee is payable in full regardless of whether the full committed amount is utilized.
Commitment fee clause with waiver for early funding
This version includes a fee waiver if the commitment is fully drawn early.
If the Borrower draws down the entire committed amount within [specified time period] from the execution of this Agreement, the commitment fee will be waived for the remainder of the term.
Commitment fee clause with commission for unused portion
This version includes commission on unused funds.
In addition to the commitment fee, the Borrower agrees to pay a commission of [percentage]% on any unutilized portion of the committed funds. This will be assessed quarterly and payable within [number] days.
Commitment fee clause with fixed fee for smaller commitments
This version applies a fixed fee for smaller commitments.
For commitments of less than [specified amount], the Borrower agrees to pay a fixed commitment fee of [specified amount] per annum. For larger commitments, the fee will be calculated at [percentage]% per annum on the unutilized portion.
Commitment fee clause with commission on early drawdown
This version includes a commission for early drawdown.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the unutilized portion of the committed amount. If the full commitment is drawn within [specified time period], the Borrower will be charged an additional commission of [percentage]% of the early drawdown.
Commitment fee clause with fee based on asset value
This version calculates the fee based on the value of committed assets.
The Borrower agrees to pay a commitment fee of [percentage]% of the total value of assets committed under this Agreement, regardless of whether the full value of the assets is utilized.
Commitment fee clause with fee for renewal periods
This version includes a fee for renewal periods.
Upon renewal of this Agreement for an additional term, the Borrower agrees to pay a commitment fee of [percentage]% per annum on the unutilized portion of the commitment. The fee will be due at the start of each renewal period.
Commitment fee clause with fee for funds availability
This version includes a fee for the availability of funds.
The Borrower agrees to pay a commitment fee of [percentage]% on the total committed amount for making funds available, regardless of whether the funds are drawn. The fee will be due quarterly.
Commitment fee clause with fee based on disbursement frequency
This version ties the fee to the frequency of disbursements.
The commitment fee is calculated as [percentage]% per annum on the unutilized portion of the committed funds. If the Borrower draws on the funds less frequently than [specified time period], an additional [specified amount] will be charged per drawdown.
Commitment fee clause with discount for early payment
This version includes a discount for early payment of the fee.
The Borrower may receive a discount of [percentage]% on the total commitment fee if the fee is paid in full within [specified time period] from the execution of this Agreement. The discount will be applied to the total amount due.
Commitment fee clause with sliding scale based on usage
This version includes a sliding scale based on how much of the commitment is used.
The Borrower will pay a commitment fee of [percentage]% per annum on the unutilized portion of the committed amount. However, if the Borrower utilizes more than [specified percentage]% of the committed amount, the fee will decrease to [lower percentage]% for the remaining balance.
Commitment fee clause with commission for renewals
This version includes commission for renewals.
The Broker shall receive a commission of [percentage]% of the commitment fee for each renewal of this Agreement. The commission will be due within [number] days of the renewal date.
Commitment fee clause with fee for unutilized committed period
This version includes a fee for unutilized periods.
If the Borrower does not utilize the full committed amount within [specified period], a fee of [specified amount] will be charged for each unutilized month, payable within [number] days.
Commitment fee clause with fee for extending commitment period
This version includes a fee for extending the commitment period.
In the event that the commitment period is extended by the Borrower, a commitment fee of [percentage]% per annum will be charged on the unutilized portion of the commitment during the extension period.
Commitment fee clause with fee based on available funds
This version charges a fee based on available funds.
The Borrower agrees to pay a commitment fee of [percentage]% per annum based on the available funds under this Agreement, regardless of the amount drawn. The fee is due quarterly and will be based on the balance available for disbursement.
Commitment fee clause with penalty for unused funds
This version includes a penalty for unused funds.
The Borrower will pay a commitment fee of [percentage]% on the total unutilized portion of the committed funds. If the funds remain unused for more than [specified time period], an additional penalty fee of [specified amount] will be charged.
Commitment fee clause with flat-rate fee
This version applies a flat-rate fee regardless of utilization.
The Borrower agrees to pay a flat commitment fee of [specified amount] per annum on the total committed funds. This fee will be payable annually, regardless of whether the funds are drawn.
Commitment fee clause with increase after partial drawdown
This version includes an increase in fee after partial drawdown.
The Borrower agrees to pay a commitment fee of [percentage]% on the undrawn portion of the committed amount. However, if the Borrower draws [specified percentage]% or more of the committed funds, the fee will increase by [percentage]% on the remaining undrawn portion.
Commitment fee clause with increased fee for high-risk commitments
This version applies a higher fee for high-risk commitments.
For high-risk commitments, as determined by the Lender, the Borrower agrees to pay a commitment fee of [percentage]% per annum. If the risk is deemed higher due to market conditions or borrower performance, the fee will increase by [specified amount].
Commitment fee clause with early withdrawal fee
This version charges a fee for early withdrawal of funds.
If the Borrower withdraws any portion of the committed funds before the agreed date, an early withdrawal fee of [percentage]% of the withdrawn amount will be charged, in addition to the commitment fee.
Commitment fee clause with reduced fee for minimal usage
This version reduces the fee for minimal usage of the committed funds.
If the Borrower uses less than [specified percentage]% of the committed amount, the commitment fee will be reduced to [lower percentage]% of the total unutilized funds. The reduced fee will apply for the following [specified time period].
Commitment fee clause with fee adjustment based on loan type
This version adjusts the fee based on the loan type.
The commitment fee is set at [percentage]% for secured loans and [higher percentage]% for unsecured loans. The fee will be based on the total committed amount and will be due quarterly.
Commitment fee clause with fee reduction based on drawdown volume
This version reduces the fee based on the volume of funds drawn.
If the Borrower draws more than [specified percentage]% of the committed funds within [specified period], the commitment fee will be reduced by [specified percentage]% for the remainder of the commitment.
Commitment fee clause with fee for partial cancellation
This version applies a fee if the commitment is partially canceled.
In the event that the Borrower cancels a portion of the committed funds, the Borrower will be charged a commitment fee of [percentage]% on the undrawn portion, with an additional fee of [specified amount] for the partial cancellation.
Commitment fee clause with fee for financial conditions
This version ties the fee to financial conditions.
The Borrower agrees to pay a commitment fee of [percentage]% per annum on the undrawn portion, subject to adjustments based on the Borrower's financial conditions. The fee may be increased if the Borrower’s credit rating declines.
Commitment fee clause with fee for unused credit lines
This version applies to unused credit lines.
The Borrower agrees to pay a commitment fee of [percentage]% on any unused credit lines made available under this Agreement. The fee will be calculated quarterly and paid within [number] days.
Commitment fee clause with flexible payment schedule
This version allows for flexibility in the payment schedule.
The Borrower may pay the commitment fee quarterly or annually, depending on the Borrower’s preference. The fee is calculated based on the unutilized portion of the committed amount, due within [number] days after the agreed payment period.
Commitment fee clause with payment deferred until utilization
This version defers payment until the funds are utilized.
The Borrower’s commitment fee will be deferred until such time as any portion of the committed funds is utilized. Once the funds are drawn, the fee will be due within [number] days.
Commitment fee clause with fee for full commitment utilization
This version includes a fee for utilizing the full commitment.
If the Borrower draws down the entire committed amount, the Borrower will pay an additional fee of [percentage]% on the drawn amount. The fee is due within [number] days of the drawdown.
Commitment fee clause with fee for slow drawdown
This version applies a fee for slow utilization of funds.
If the Borrower fails to draw the full committed amount within [specified period], a fee of [specified amount] will be charged for every [specified time period] the funds remain unused.
Commitment fee clause with early repayment discount
This version offers a discount for early repayment.
The Borrower may receive a discount of [percentage]% on the commitment fee if the committed funds are fully repaid before the due date. The discount will be applied to the next fee due.
Commitment fee clause with reduced fee for high utilization
This version applies a reduced fee for high utilization of funds.
If the Borrower draws more than [specified percentage]% of the committed funds within [specified period], the commitment fee will be reduced by [percentage]% for the remaining balance.
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