Definition - What does Facility Plan mean?
A facility plan is a loan plan offered by a bank to a client who owns or runs a business. The loan may be short- or long-term and is specifically meant to fund operating capital or other capital needed for the client's business. In the context of insurance, the borrower can consider various forms of loan protection insurance.
Insuranceopedia explains Facility Plan
A business owner can choose from different facility plans offered by different banks to fund their business needs. This act of borrowing is also known as debt financing, wherein the borrowed money is for raising operating capital. A person who has a facility plan is recommended to avail of loan protection insurance, which will make payments on the insured’s debt in the event they become injured or die. There are four types of loan protection insurance, namely credit life insurance, credit disability insurance, involuntary unemployment insurance, and credit property insurance.
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