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.
The revolving line of credit has been extended to USD35m from USD25m currently and maturity has been extended to 13 February 2015 from 11 July 2013.
Proceeds from the new financing will be used to retire and replace the Company's existing term loan facility and revolving line of credit, which bears interest at LIBOR plus 375 basis points with a 3% LIBOR floor.
The revolving line of credit matures in five years, accrues interest at a rate of the one month LIBOR plus 2.
According to AMD, the proceeds of the secured revolving line of credit may be used for general corporate purposes, including working capital needs.
The Credit Agreement provides for a revolving line of credit in the principal amount of up to $175 million.
Prior to the amendment, there was $165 million outstanding under the revolving line of credit, which included a balance of $130 million as of June 27, 2008, plus an additional $35 million used to partially fund the two acquisitions that closed in the third quarter.
4m with a provider of facilities maintenance services, Pristine Environments Inc, in McLean, Virginia with the facility comprising of a senior revolving line of credit and a senior term loan, the proceeds of the facility will partly finance an acquisition and be used for working capital.
M2 EQUITYBITES-December 5, 2011-Synergy Resources Corporation announces rise in revolving line of credit to USD15m(C)2011 M2 COMMUNICATIONS http://www.
Encore Wire announced that it had expanded its existing revolving line of credit to $200,000,000 from $150,000,000.
This credit facility reportedly consists of a USD100m three-year revolving line of credit and a USD200m three-year term loan.
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.