Also known as commitment commission. A fee payable by the borrower to the lender under a loan agreement calculated by reference to the amount of the undrawn and uncancelled loan during the availability period. In a syndicated loan, it will be payable to each of the lenders via the agent.

The fee is designed to compensate the lender for capital adequacy requirements associated with lending.

Typically, the fee is calculated at a rate equal to roughly half the margin and is paid monthly or quarterly in arrear.