facility
noun
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Definition of facility
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Examples of facility in a Sentence
Recent Examples on the Web
Strauss has agreed to meet Residents Preference Program and Small Business Enterprise requirements in the construction of the new facility. — Tom Daykin, Milwaukee Journal Sentinel, "Franklin meat processor Strauss Brands, with 250 jobs, moving to Century City Business Park," 4 Sep. 2019 Lynn, an eye doctor who underwrote the University of Louisville's soccer stadium and recently bought the naming rights to the new pro soccer facility in Butchertown, was asked afterward about a potential backlash over accepting Schnatter's donation. — Grace Schneider, The Courier-Journal, "John Schnatter's $1 million gift to Simmons College raises differing opinions," 4 Sep. 2019 The 60-year-old hospital, owned by Ethos Veterinary Health — a nationwide chain of 14 animal hospitals — opted to relocate in order to offer new and expanded facilities. — John Laidler, BostonGlobe.com, "Veterinary hospital celebrates new facility in Lawrence," 3 Sep. 2019 Slightly more than half of the new arrivals are being taken to a temporary camp and will be moved next month to a new facility. — Washington Post, "World Digest: Sept. 3, 2019," 3 Sep. 2019 Most recently, Trump has called for greater attention to mental health, saying that new facilities are needed for the mentally ill as a way to reduce mass shootings. — Jake Bleiberg, The Denver Post, "Death toll in West Texas shooting rampage rises to 7," 1 Sep. 2019 Most recently, Trump has called for greater attention to mental health, saying that new facilities are needed for the mentally ill as a way to reduce mass shootings. — San Diego Union-Tribune, "Death toll in West Texas shooting rampage rises to 7," 1 Sep. 2019 The report said new facilities alone would not fix the problems of violence, weapons, drugs, corruption and under-staffing. — Mike Cason | Mcason@al.com, al, "5 companies tell Alabama they can finance, build, lease prisons," 26 Aug. 2019 East Bay nostalgia took a flyer Monday as the Bay Area media took a tour of the Warriors’ new Chase Center facility. — Bruce Jenkins, SFChronicle.com, "Chase Center tour: Photos from the Warriors' new SF arena," 26 Aug. 2019These example sentences are selected automatically from various online news sources to reflect current usage of the word 'facility.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for facility
facility
nounFinancial Definition of facility
What It Is
A facility is essentially a bank loan agreement that a company can use on and off for short-term borrowing purposes.
How It Works
For example, let’s assume Company XYZ is a jewelry manufacturer. The company is typically flush with cash in July when retailers place their orders for the upcoming Christmas season. The company is typically tight on cash in December, when orders are lower and it is buying supplies to manufacture the coming year’s designs.
This ebb and flow of cash can ruin a company if it doesn’t have access to a facility. If Company XYZ gets, say, a $2 million facility from the bank, it can borrow up to $2 million (and not necessarily all at the same time) to “get by” in December and then repay that cash six months later in July when it is flush with cash again.
Bank facilities can be overdraft facilities, which provide short-term loans to companies only when their cash accounts actually run dry, or credit facilities, which provide short-term loans to companies when they need supplemental cash for various purposes. Banks might also provide letter of credit facilities or even term loan facilities.
Facilities typically are for limited amounts and don’t require collateral. Often, they come about as part of an equity offering or other financial event that a company may undertake. The terms vary widely, but in most cases, the bank requires repayments monthly or quarterly, in addition to interest, though often companies can “term out” a facility, meaning they can negotiate a longer repayment period with the lender for some larger balances.
Why It Matters
The purpose of most bank facilities is to ensure that a company has access to cash at all times, and they can be particularly important for companies with seasonal sales cycles or other situations in which cash balances are particularly low at times. This prevents the company from having to lay off workers, reduce growth or shut the doors when cash is temporarily low.
Source: Investing Answers
facility
noun
English Language Learners Definition of facility
See the full definition for facility in the English Language Learners Dictionary
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Kids Definition of facility
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facility
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