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 ?
Czech Republic is planning to allocate a credit line of e1/4100 million to support Iran's infrastructure projects," Cumba said on Sunday.
350 million euros have already been provided from the European Investment Bank, which is the largest credit line ever approved to the country.
The tender says there must be a written declaration by the bidder to say they are fully briefed on the Iranian credit line agreement between Syria and Iran and that they accept all the contents of the terms and conditions," another European trader said.
Three additional questions identify how students would spend the credit lines and whether they adhere to their initial assertion concerning use of the credit line.
In particular, Sberbank will extend two non-revolving credit lines each amounting to RUB1bn, another non-revolving credit line worth RUB500m and a RUB1bn revolving credit line.
The company said that it has increased its credit line to Koor Industries by CHF500m.
Our solution has been to set up subsidiaries overseas with partners who can provide necessary credit lines and consequently move HQ operations offshore.
A credit line can work for some companies, provided that the money is used for a purpose supported by the company's business plan.
When analyzing your customer's financial statement, it is important to understand how close the company is to reaching their maximum borrowing under the bank credit line.
On Thursday, the company said it had planned to repay the credit line it had drawn upon with proceeds from a $1 billion planned bond offering.
The credit line is open for one year and self-liquidates over the remaining five years, providing for the complete payment of principal at the end of the term.