Maximum loan amount that a borrower can draw upon as needed.
A line of credit (also known as a “bank operating loan” is a short-term, flexible loan that a business can use as needed to borrow up to a pre-set amount of money. A line of credit is convenient for bridging gaps between the points when accounts payable are settled and accounts receivable are collected.
Your credit score and credit history will play a significant role in determining whether you qualify for a line of credit and the interest rate you'll be charged.
Lines of credit can be secured or unsecured. A secured line of credit is backed by collateral, such as a home or car, while an unsecured line of credit is not.