Line Of Credit

An agreement by a financial institution such as a bank to extend credit up to a certain amount for a certain time to a specified borrower.

Stock market (equity market) Foreign exchange market Derivatives market Commodity market Money market Spot market (cash market) Over the counter Real estate Private equity Financial market participants: Investor and speculatorDeposit Option (call or put) Loans Security Derivative Stock Time deposit or certificate of deposit Futures contractCapital budgeting Financial risk management Mergers and acquisitions Accountancy Financial statement Audit Credit rating agency Leveraged buyoutStudent financial aid Employment contract RetirementTransfer payment (Redistribution) Government operations Government final consumption expenditure Government revenue: Taxation Non-tax revenue Government budget Government debt Surplus and deficit deficit spendingCentral Bank List of banks Deposits LoanRecession Stock market crashA line of credit is any credit source extended to a government, business or individual by a bank or other financial institution. A line of credit may take several forms, such as overdraft protection, demand loan, export packing credit, term loan, discounting, purchase of commercial bills, etc. It is effectively a bank account that can readily be tapped at the borrower's discretion. Interest is paid only on money actually withdrawn. Lines of credit can be secured by collateral or unsecured. Lines of credit are often extended by banks and financial institutions. . . to creditworthy customers to address liquidity problems; such a line of credit is often called a Personal Line of Credit. The term is also used to mean the credit limit of a customer, that is, the maximum amount of credit a customer is allowed. A cash credit is a short-term cash loan to a company. A bank provides this type of funding, but only after the required security is given to secure the loan. Once a security for repayment has been given, the business that receives the loan can continuously draw from the bank up to a certain specified amount. -prearranged loan that a business does not have to take until it is needed.