Line of credit

• An agreement between a chartered bank and a business specifying the amount of unsecured short-term borrowing the bank will make available to the firm over a given period of time.

• An informal arrangement between a bank and a customer establishing a maximum loan balance that the bank will permit the borrower to maintain.

• An arrangement by which a bank agrees to lend to the line holder during some specified period any amount up to the full amount of the line.


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