Management Glossary

  Search Results: line of credit
line of credit

An amount of money that a bank or other financial institution has pre-approved to lend to a company or individual, but which the potential borrower has not yet and may never borrow. Financial institutions often charge a fee for establishing a line of credit. The line of credit may be secured (meaning that the potential borrower has pledged tangible assets that the lender can claim to cover the debt if the prospective borrower does in fact borrow the funds, but does not pay them back) or unsecured. Funds borrowed under an unsecured credit line typically must be paid off within one year.

Contributed by: Managerwise Staff

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