Plain definition
An undrawn facility is the unused portion of a borrowing limit at a stated date. It is calculated from the contractual limit less the amount already borrowed, but it is not automatically cash the company can spend. A notice period, fees, expiry date, covenant test, or other draw condition may prevent access to some or all of the unused amount.
Illustrative example
Monetary examples use Saudi riyals (SAR). The same principles apply in other currencies.
A company has a committed facility and has drawn . The arithmetic leaves undrawn. It plans to draw for a supplier invoice due in three days, but the agreement requires five business days’ notice. Even though the facility has enough unused capacity, it cannot solve this week’s payment timing without another source.
| Facility limit | |
|---|---|
| Amount drawn | |
| Undrawn amount |
Undrawn is a balance description. ‘Available to draw now’ is a separate conclusion that requires checking the agreement and current facts.
Why it matters
Management may see a large unused limit and stop asking whether cash will arrive on time. That error is most damaging when a supplier, payroll, or tax payment has a hard due date. Separating unused capacity from drawability turns a comforting headline number into a usable liquidity view.
Practical consequence
Report the limit, amount drawn, arithmetic undrawn amount, earliest draw date, notice period, expiry, and conditions together. Reconcile the drawn figure to the lender statement and cash forecast. Before promising a payment from the facility, have the responsible person complete the draw checklist and identify another source if the timing or conditions fail.