What is a promise by a lender to advance funds when loan conditions are met?

The term that best describes a promise by a lender to advance funds when loan conditions are met is "commitment." This reflects a specific assurance from the lender that they will provide the specified loan amount once the borrower fulfills all the necessary prerequisites, such as providing specific documentation, satisfying credit requirements, or completing other preliminary steps.

In a lending context, a commitment is often formalized in a commitment letter, which outlines the terms and conditions under which the funds will be made available. It signifies the lender’s intention to lend, contingent upon the borrower meeting defined criteria, providing clarity and certainty to both parties in the loan transaction.