What is a Framework Credit Facility?

A Framework Credit Facility (Vietnamese: Cho vay theo hạn mức khung) is a master credit arrangement between a lender and a borrower that establishes an overall credit limit, pricing, covenants, and general terms. Individual disbursements are made under this umbrella agreement without requiring a new standalone loan contract for each drawdown, significantly reducing administrative burden.

Key Features

• Master Agreement: A single overarching contract governs multiple drawdowns
• Flexible Utilization: Borrowers draw funds as needed, up to the approved limit
• Term: Typically 1–3 years, renewable upon mutual agreement
• Multi-purpose: May cover working capital, trade finance, guarantees, and more

Benefits for SMEs in Vietnam

For Vietnamese SMEs, framework credit facilities streamline the borrowing process, reduce paperwork, and allow businesses to respond quickly to financing needs. Banks such as Vietcombank, Techcombank, and MB Bank offer this product to qualified business customers with stable cash flows.

Difference from Revolving Credit

While revolving credit automatically replenishes as repayments are made, a framework credit facility may include both revolving and term sub-limits, offering greater flexibility in structuring the overall financing package.

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