line of credit

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Related to Revolving Loans: Revolving credit facility, Revolving Loan Funds

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 ?
The term loan lenders will share in the same security package as the revolving lenders; however, the term loans will be subordinated in right of payment to the revolving loans.
The Company today used the $40 million term loan proceeds to pay down outstanding revolving loans, thus increasing availability under the revolving portion of the credit facility and enhancing the Company's current liquidity position.
Under the new credit facility, the Company may use revolving loans for working capital and other operating needs as well as for acquisitions and other permitted purposes.
Prior to the refinancing, the interest rate for A term loans and revolving loans under the Company's prior credit facility was LIBOR plus a margin of 1.
A portion of the term loans and all revolving loans under the Company's existing U.
The net proceeds of this offering will be used to repay a portion of outstanding revolving loans under the Company's existing U.
Two other groups issue taxable bonds to fund local government loans and tax-exempt bonds for revolving loans for water and sewer projects.
The Technology Finance Division of Textron Financial is headquartered in North Wales, Pennsylvania, and specializes in inventory financing, accounts receivable revolving loans, term loans and purchase order financing to the information technology and telephony industries.
The new credit facility provides the Company with US $400 million of US A term loans, [euro]125 million of Euro A term loans, Cdn $81 million of Canadian A term loans and a US $800 million multicurrency revolving loan facility.
The credit facility consists of a $15 million revolving loan facility and a $2.
Interest on the unpaid principal balance of the revolving loan accrues at a rate equal to LIBOR plus 2.