Line of Credit

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Line of Credit

The maximum borrowing power granted to a person from a financial institution.

Line of credit denotes a limit of credit extended by a bank to a customer, who can avail himself or herself of its full extent in dealing with the bank but cannot exceed this limit. It most frequently covers a series of transactions, in which case, when the customer's line of credit is nearly exhausted or not replenished, the customer is expected to reduce the indebtedness by submitting payments to the bank before making additional use of the line of credit.

See: capital
References in periodicals archive ?
Completion of the Plan resulted in: 1) Refinancing the Company's Demand Line of Credit as a Long Term Note, 2) Raising gross proceeds in excess of $3.
The lender has been monitoring the Company's demand line of credit and its term and mortgage loans.