Line of credit
Line of credit is an arrangement in which a bank agrees to lend up to a specified maximum amount of funds during a designated period.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Line of credit. An arrangement in which a bank agrees to lend up to a specified maximum amount of funds during a designated period.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Line of credit. A lending arrangement from a bank in which a company is allowed to borrow money as needed, up to a specified maximum amount, yet only pay interest on the portion that is actually borrowed until it is repaid.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
