A standby commitment differs from a permanent take-out commitment in that neither party really expects the standby commitment to be used by the developer.

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A standby commitment is essentially a backup plan in case the developer is unable to secure permanent financing. It is not expected to be used, but rather serves as a temporary solution until the developer can secure permanent financing. A permanent take-out commitment, on the other hand, is a more formal agreement for long-term financing of a project.

A Standby Commitment Differs from a Permanent Take-Out Commitment in That