Full question:
What is a Letter of Commitment? Also, if a person were going to a bank to borrow up front money, would this letter of commitment from the Project Lender be good as collateral?
- Category: Contractors
- Date:
- State: California
Answer:
A letter of commitment, also known as a commitment letter or loan commitment, is a formal notification from a lender indicating that a borrower's loan has been conditionally approved. It outlines the terms under which the lender agrees to provide the loan.
Whether a bank would accept this letter of commitment as collateral depends on the bank's specific lending policies.
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