Line of Credit

A line of credit (LOC) is an account that which a company or individual borrows money as needed up to a preset borrowing or credit limit. It is essentially the opposite of a term loan. A line of credit can be a revolving line of credit (“revolver”) or a non-revolving line of credit. A revolving line of credit permits a borrower to borrow funds, pay them back, and borrow again. A non-revolving line of credit does not allow the borrower to reborrow once a prior amount borrowed is repaid.