A/R Finance & Factoring Terms GLossary

Definition ofLine of Credit (LOC)

A Line of Credit (LOC) is a credit facility provided to the government, business or individual by a financial institution or another commercial funder. The borrowing can typically draw down on the account at any time, with a maximum limit which cannot be exceeded. The advantage with a LOC over a term loan is a borrower is typically only charged interest on the amount withdrawn at any given time vs an entire loan amount.

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