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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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.
To determine whether or not it is feasible for your business to borrow bank money and take the discount, you need to: 1) compute how much of a savings (monthly or annually) can be realized by taking the discount, and 2) compute how much it will cost to borrow the funds via a bank revolving line of credit.
The expanded revolving line of credit enables the customer to have access to liquidity to continue to grow their brand both domestically and internationally.
The secured revolving line of credit is subject to a borrowing base of trade accounts receivable.
International Resource News-December 29, 2011--Doral Healthcare Finance offers three-year USD3m revolving line of credit(C)1994-2011 ENPublishing - http://www.enpublishing.co.uk
Triangle Equities Development Company, through its related entity, 42-05 Parsons LLC, has acquired a non-performing construction loan and revolving line of credit from First American International Bank.
A 19-acre commercial tract in North Little Rock is securing a $5.4 million revolving line of credit.
The airline and its lender have now extended the expiration date of AirTran's combined letter of credit and revolving line of credit facilities to 31 December 2010.
Bennett is reportedly a preferred customer at four casinos with a revolving line of credit of at least USD200,000 each.
CBL Properties (NYSE:CBL) declared on Thursday that it closed on a new senior secured facility (the facility) worth USD1.185bn, which includes a fully-funded USD500m term loan and a revolving line of credit with total borrowing capacity of USD685m.
Reports cash, cash equivalents and short-term investments of approximately $27M at December 31, 2018, and the revolving line of credit was undrawn.
(NYSE: INN) has announced it has closed on a new USD 600 million unsecured credit facility, comprised of a USD 400 million unsecured revolving line of credit and a USD 200 million unsecured term loan and replaces the Company's existing USD 450 million unsecured credit facility, the company said.