facility
noun
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Definition of facility
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Examples of facility in a Sentence
Recent Examples on the Web
Check-in Steel this job: U.S. Steel is temporarily laying off workers at its Great Lakes facility in Michigan after falling prices and demand, Reuters reports. — cleveland.com, "More economic uncertainty with tariffs, steelworker layoffs and angry farmers: The Flyover," 21 Aug. 2019 After over a decade of piloting the technology, LanzaTech recently opened its first commercial facility at a steel mill in China that has capacity to produce 16 million gallons of ethanol per year. — Alicia Dunn, Fortune, "Speeding the Journey from Startup to ‘Change the World’ Company," 20 Aug. 2019 Without a new contract, there is little to prevent the companies from shuttering their facilities, officials have said. — Elise Schmelzer, The Denver Post, "Denver to pursue short-term contracts with private prison companies while permanent solutions sought," 20 Aug. 2019 The Lakers will also reportedly host Joakim Noah at their facility as well as Mo Speights. — Michael Shapiro, SI.com, "Report: Lakers Planning Workouts for Joakim Noah, Dwight Howard, Mo Speights," 20 Aug. 2019 In a Monday afternoon statement, San Diego utility company Sempra Energy reported that Train 1 at its Cameron LNG facility is officially export liquefied natural gas on a commercial basis. — Sergio Chapa, Houston Chronicle, "Cameron LNG begins commercial operations," 20 Aug. 2019 According to Planned Parenthood, their facilities currently serve 40% of all Title X patients. — Katelyn Burns, Teen Vogue, "The Trump Admin Just Took a Huge Leap Forward in Defunding Planned Parenthood," 19 Aug. 2019 But between 2010- 2015, Bach, now 30, admitted about hundreds of severely malnourished children, 105 of them died at her facility in Masese, Jinja. — Rosebell Kagumire, Quartz Africa, "Ugandan mothers want justice for their children who died in care of an unlicensed American health worker," 17 Aug. 2019 Practices are Friday and Saturday against the Broncos at their facility, leading into Monday night’s exhibition. — Cam Inman, The Mercury News, "Will 49ers visit to Denver help reverse travel nightmares?," 15 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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