Line of Credit

Posted in Finance, Accounting and Economics Terms, Total Reads: 1214

Definition: Line of Credit

Line of credit is an amount which is made available/sanctioned to a firm by a financing institution like bank or govt. wherein the WHOLE amount need NOT be taken by the firm, facilitating them to pay interest only on the drawn sum.

So, Line of credit (LOC) acts as a bank account from which the firm can withdraw money up to a certain pre fixed amount as per the agreement.

All the money in the LINE OF CREDIT is at the disposal of the borrower.

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