What is a line of credit? A revolving credit agreement?
If a lender offers a revolving loan account, a particular credit cap is allocated to the lender. This level is based on the loans, revenue, and credit history of the customer. The creditor is free to be using the credit at his own option once the account is opened.
Therefore, the account must stay available till the loaner or the borrower wants to lock the account. To order to fund capital growth or as a hedge against potential money flow issues, many micro-businesses entrepreneurs and businesses use revolving loans. Persons may use revolving loans for major and continuing purchases such as house repairs or health bills. These services may also be used to cover bank shortcomings in demand deposit accounts.
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