Sub-limit

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-01

// THE SHORT ANSWER

A sub-limit is a ceiling, inside a facility's overall limit, on one use of it — drawings in a particular currency, lending against one buyer's invoices, guarantees issued under a trade line. It lets one facility do several jobs while the bank controls how much of it any single risk can take up. In Issue 02 the senior read builds the line as an NZD core sized to local costs plus a USD sub-limit capped at 80% of eligible USD receivables; in Issue 13 the move to open account is underwritten through a buyer sub-limit set off a file on the buyer itself.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.