Spot loans are loans in which the firm would receive the funds as soon as the bank approved the loan. These days, most business loans are made as firms “take down” (or borrow against) pre-negotiated lines of credit or loan commitments. Banks make loan commitment agreements—contractual commitments to loan the firm a certain maximum amount (say, $10 million)–at given interest rate terms (say, 12 percent). The loan commitment agreement also defines the length of time over which the borrower may take down this loan