line of credit

(redirected from Revolving Loan)
Also found in: Dictionary, Thesaurus, Legal.
Related to Revolving Loan: Revolving Loan Fund

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 ?
com) is a national developer of nonprofit accounting and financial management/reporting software, and revolving loan servicing software for contract, grant and activity recipients.
The bank claims in the suit that Kondylis told the financial institution in June 2009 that it had $7 million that clients would pay soon in so-called accounts receivable, but a month later the firm defaulted on its revolving loan and recently admitted that it had less than $2 million in receivables at that time.
3 million in revolving loan funds grants from the EPA.
We've gotten away from giving community members the subsidy that we receive from the federal government, and we put that money into a revolving loan program," said Chris Maracle, director of housing, parks and band property maintenance.
The Company intends to use the gross proceeds from the Offer and certain borrowings under its new asset-based revolving loan facility to repay all outstanding indebtedness under its existing senior secured credit facilities and certain other debt, terminate each such indebtedness and pay all fees and expenses associated with the Offer and these refinancing transactions.
As a previous recipient of brownfields revolving loan funds, Allentown has already overseen the removal of drums, transformers and contaminated soil from the 17-acre site at 606 South 10th St.
Before today's handover, NHF offered community members and the Al Azraq Multi Purpose Community Cooperative revolving loan fund management training.
The loans--nearly $300,000 in all--are available through the city's Revolving Loan Fund, which leverages the growth and creation of new and current business in Manchester.
Safety-Kleen says the new credit facility includes a $100 million asset-based revolving loan, which is secured by accounts receivable and inventory, a $150 million term loan as well as a $100 million pre-funded letter of credit facility.
Efforts to revitalize Newark's neighborhoods will soon benefit from a new, $10 million revolving loan program, Gov.
The revolving loan fund, intended to help health care providers in rural Arkansas, was announced in December by President Clinton during his visit to West Memphis.
In a semi-victory for cities, House conferees insisted on modifying Senate-approved language authorizing States to charge local governments "loan origination fees" when they borrow from the water infrastructure (wastewater and drinking water) revolving loan funds.