facility

noun fa·cil·i·ty \ fə-ˈsi-lə-tē \
Updated on: 13 Oct 2017

Definition of facility

plural facilities
1 :the quality of being easily performed
2 :ease in performance :aptitude
  • has a great facility for writing
3 :readiness of compliance
4 a (1) :something that makes an action, operation, or course of conduct easier usually used in plural
  • facilities for study
  • The resort has a wide range of facilities for young and old alike.
(2) :lavatory 2 often used in plural
b :something (such as a hospital) that is built, installed, or established to serve a particular purpose

Examples of facility in a Sentence

  1. The facilities are at the end of the corridor.

  2. He had a great facility for writing.

  3. He had great facility with words.

  4. She handled the crisis with facility.

Recent Examples of facility from the Web

These 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.

Origin and Etymology of facility

see facile


Financial Definition of FACILITY

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.



FACILITY Defined for English Language Learners

facility

noun

Definition of facility for English Language Learners

  • : something (such as a building or large piece of equipment) that is built for a specific purpose

  • : something that makes an action, operation, or activity easier

  • : skill and ease in doing something


FACILITY Defined for Kids

facility

noun fa·cil·i·ty \ fə-ˈsi-lə-tē \

Definition of facility for Students

plural facilities
1 :something built for a particular purpose
  • a sports facility
2 :something that makes an action, operation, or activity easier
  • Our hotel room had cooking facilities.
3 :ease in doing something
  • She handled the job with facility.

Medical Dictionary

facility

noun fa·cil·i·ty \ fə-ˈsil-ət-ē \

medical Definition of facility

plural facilities
1 :the quality of being easily performed
2 :ease in performance :aptitude
3 :something (as a hospital) that is built, installed, or established to serve a particular purpose


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