Drawdown
The act of accessing funds from an agreed credit facility, either in a lump sum or in staged amounts.
A drawdown refers to the act of accessing money from an approved credit facility. For a term loan, the drawdown is typically the entire loan amount released at once on a single date. For revolving credit facilities, development finance, and invoice finance, drawdowns can occur multiple times as needed, up to the agreed facility limit.
Development finance drawdowns are milestone-based: the lender releases each tranche only after a monitoring surveyor confirms that the relevant construction stage has been completed to the required standard. This protects both the lender and the borrower from cost overruns and incomplete works.
For revolving credit facilities, businesses can draw down, repay, and draw down again within the facility limit, giving flexible access to capital without the need to apply for new funding each time.
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