line of credit

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Related to Revolving Line: Revolving credit facility, Available Credit

Line of credit

An informal loan arrangement between a bank and a customer allowing the customer to borrow up to a prespecified amount.

Line of Credit

An agreement between a bank and a company or an individual to provide a certain amount in loans on demand from the borrower. The borrower is under no obligation to actually take out a loan at any particular time, but may take part of the funds at any time over a period of several years. This agreement is fairly common in situations in which a business must make payroll but does not always have the operating income to do so, especially when its operating income is seasonal or otherwise varies from month to month. It is also called open-end credit or a revolving line of credit. See also: Credit Card.

line of credit

A credit arrangement in which a financial institution agrees to lend money to a customer up to a specified limit. A line of credit, generally arranged before the funds are actually required, provides flexibility for the customer in that it ensures the ability to meet short-term cash needs as they arise. Also called bank line, credit line, revolver, revolving credit agreement.

Line of credit.

A line of credit, sometimes called a bank line, is the most you can borrow under a revolving credit arrangement with a credit card issuer, bank, or mortgage lender.

When you borrow against a line of credit, you pay interest on the amount of money you actually borrow, not on the available balance, or full amount you are able to borrow.

For example, if you have a $10,000 line of credit on a credit card, you may borrow as much or as little as you want up to that amount, and you pay interest only on the amount you have borrowed.

If you carry a balance of $3,000, you only pay interest on that amount, but there is still $7,000 available for you to borrow. Once you repay the amount you borrow, you can use it again.

A line of credit may be secured with collateral, or unsecured. A line of credit on a credit card is usually unsecured, for example. But if you have a home equity line of credit, your home serves as collateral against the amount you borrow.

line of credit

A revolving loan issued by a financial institution;it may be secured by a mortgage or other collateral, or unsecured.The borrower may draw down the line, up to the maximum limits, at any time and pay interest each month. If the principal is repaid during the time period of the line, then the maximum amount or any lesser amount may be drawn down again.Lines of credit are typically for one year, and then extended from year to year afterward. If a borrower draws down the maximum amount and then does not repay any of the principal,the lender will eventually refuse to renew the note and may require payment in full or conversion to an amortizing loan with regular monthly payments that will eventually pay it in full.Lines of credit are best used by persons with reliable income arriving at sporadic times or by persons awaiting the sale of an asset but needing cash in the meantime.

References in periodicals archive ?
We have worked closely with PFG on two previous financings and this revolving line of credit facility is similar to the revolving line of credit facility we entered into with PFG in December 2004.
Proceeds from the revolving line of credit are expected to be used for working capital and general corporate purposes in addition to the opportunistic purchase of hotels in the future.
Brooktrout will put in place a revolving line of credit for $2,500,000.
The Credit Facility, which covers a revolving line of credit up to a maximum of $90 million, will have an initial term of three years with automatic annual renewals (unless terminated after completion of the initial term by The CIT Group/Business Credit, Inc.
Jones, President and Chief Executive Officer of Encore Wire Corporation, said, "We expanded our revolving line of credit to keep pace with the growth of Encore Wire and to meet the increased working capital requirements our industry is experiencing.
Burke, Vice President of Finance and Chief Financial Officer of Boston Technology said, "The increase in our revolving line of credit facility from $15 million to $20 million provides the Company with additional back-up working capital availability to satisfy the requirements of our domestic and international customers; while the renewal of the foreign exchange lines of credit permit the Company to continue to minimize the effects of changes in currency rates arising from its increasing international activities.
On June 6, the Company entered into a $10 million secured revolving line of credit with M&T Bank, and contributed the proceeds to the Bank as Tier I capital.
The new facilities, which are intended to ensure that the Company will have adequate funding to meet working capital needs over the next several years, consist of a $65 million revolving line of credit through July 1997, a $40 million term loan amortizing to July 1997, and a $45 million bridge loan maturing January 1996.
Concurrently, Lehman Brothers has committed to fund a $56,347,500 revolving line of credit which will be secured by five properties.
for a revolving line of credit of up to $4 million, which will supplement the existing line of credit provided by Silicon Valley Bank.
25% APR currently), features a revolving line of credit based on the value of eligible securities placed in an investment account at Merrill Lynch, Pierce, Fenner & Smith Incorporated.
5 million bank revolving line of credit with a two year $5.