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Commitment Letter Sample

A legally valid document that commits two parties to a financial assistance agreement, a commitment letter is very easy to draft and can be easily understood with the help of a sample. In this article, we give you the format of such a letter and a sample so that you can understand how to write one.
Tulika Nair
A commitment letter is a letter applicable in the court of law which is sent out either by the lender to the loan applicant or vice versa. Often it is either a letter committing the lender to give money to the applicant or a letter from the applicant verifying information and committing to the terms and conditions as specified by the lender. The letter, when written by the lender to the loan applicant is also known as the Offer of Advance. It is actually a cover letter that accompanies the formal contract between the two parties. While the format changes depending on the demands of the situation, the general manner in which the letter is to be written is simple to understand. A sample is one of the easiest ways to understand the basis of drafting this letter but it is also important to understand the format of such a letter.

Format
A commitment letter should always be to the point and concise. Do not use fancy words and experiment with styles of writing. Like any form of business writing, a commitment letter should be professional in its outlook. Always check for any kind of spelling errors and grammatical mistakes in your letter before sending it to the concerned person. Before we take a look at a sample, let us give you the proper format that will act as a guide for drafting your own letter.

Your Name
Your Organization
Organization's Address

Date

Name of Addressee
Addressee's Designation
Address

Reference: Include all the relevant details about the project you are committing to in a succinct and precise manner.

Salutation/Greetings
Dear Ms./Mr. (addressee)/ To whomsoever it may concern

In the first paragraph, detailing the features of the product decided upon, inform the addressee of your intention to commit to the project at hand. Ensure that you mention that you are prepared to meet the deadline as fixed by the organization that the addressee works for and hereby apply for the loan. Also it is important to mention the official project name.

In the second paragraph, ensure that you mention that you are aware of the repercussions of not being able to meet the deadline achieved and not complying with the standards as set by the authorizing firm. Also mention information about any enclosed documents that you are sending out with the letter. End the letter by thanking the firm for considering your organization for the financial assistance that you are being given.

Valediction/Goodbye
Yours sincerely,
(Signature)
(Your name)

Sample
Writing a perfectly phrased letter is not as difficult as it is made out to be. While the general format remains the same as above, different situations warrant different formatting styles which is the reason for the many examples that are found online. Given below is a sample that follows the format given above.

Mary Homer Clark
Green Recycling Solutions
PO Box, 679
Trenton, New Jersey - 09834-48458

Date: 1st of February 2012

Hamilton Clark
Director, Waste Disposal Operations
New Jersey Department of Environmental Protection
PO Box 706
Trenton, New Jersey - 09834-48458

Reference: Application for financial assistance as per Project List for SFY 2012 and NJAC 389-9:1.

Dear Mr. Clark,

This is in reference to the provisions of the Priority System, Intended Use Plan and Project List for SFY 2012 and NJAC 389-9:1. As the authorized representative for my firm on the project, we hereby commit to meet the project deadlines and the deadlines for financial application as defined by the trust and the NJDEP for participation in the SFY2012 Financing Program.

We as a firm understand that a failure on our part to meet the requirements as specified and the deadlines as set by the New Jersey Department of Environmental Protection can result in legal action and hold us ineligible for the 2012 Financing Program. Enclosed please find a project ranking form, including a list of proposed modifications to the information representing list given earlier.

Thanking you,

Yours sincerely
(M.H.Clark)
Mary Homer Clark
Green Recycling Solutions

Now that you know what a commitment letter is and understand the format that needs to be used to draft the same, you will have no problem writing a similar letter. A sample just elucidates the letter format better, as it is easy to understand the format of a letter format with the use of an example. The letter is a legally binding document and therefore, it would be a good idea to seek the expertise of a legal counsel before sending out the letter to the concerned party.