What is line of credit?

Tuesday, 06 January 2015 11:26

Version 1

Crediting in a line of credit form

Line of credit is a goal-oriented commercial agreements crediting of market participants with partial credit usage within the fixed limit and during certain period of time, which is determined by a credit agreement.

Line of credit has several advantages for bank customers:

  • Within fixed limit framework, a client has an opportunity to use credit funds once the necessity appears, which, in its turn, allows to decrease credit service expenses.

Non revolving line of credit

Non revolving line of credit means that total amount of funds, which was provided during the currency of non revolving line of credit, is not to exceed the initially determined loan amount.

Revolving line of credit

Revolving line of credit provides extension and reimbursement of credit within the limits of initially determined loan amount.

  • crediting period comprises 1-3 years
  • Within the framework of determined limit of credit line, a client can easily operate the funds to pay for some production requirements or current demands.

Multi-currency credit line

Multi-currency credit line can be offered to a client who deals with foreign economics. This will allow him to get multicurrency tranche but with one limit of indebtedness over all the tranches in one currency, which is determined by the agreement. Under this agreement, all the duties in any currency have common supply.

  

Version 2

Lending in the form of credit line

Credit line – direct lending of the economic entities commercial agreements with using the loan amount by installments, within the fixed limit and for a period of time determined by the credit agreement.

The advantages of a credit under the credit line technology for the bank clients:

• the client is given the opportunity to use loan funds within the fixed limit immediately when needed, that in its turn, reduces the loan service expense.

Non-revolving credit line – the total amount of funds that are provided during the term of non-revolving credit line (the issue of funds amount on the debit side of the loan account) must not exceed the pre-conditioned credit amount.

Revolving credit line involves extending and returning of the loan within the pre-conditioned credit amount.

• Loan term - from 1 to 3 years;

• within the stipulated credit line limit, the client uses the funds freely to pay for his production requirements and present needs.

Multicurrency credit line may be obtained by a client who conducts foreign trade activities. This will provide an opportunity to obtain a tranche in different currencies, but with one debt ceiling in all the tranches in one currency stipulated by the contract. All obligations in any currency under such agreement have single ensuring.

 

Version 3

Credit line financing

Credit line — direct lending of commercial agreements of economic entities using the sum of loan installments within the established limit and for a period of time determined by the credit agreement.

Advantages of credit under the credit line technology for bank customers:

— The client is given the opportunity within the established limit to use loan funds directly at the time of need, which in turn reduces the cost of loan servicing.

Non-revolving credit line - the total amount of assets granted during the operation of the non-revolving line of credit (the sum of debit disbursement loan account) shall not exceed the preliminarily conditioned loan amount.

Revolving credit facility provides granting and return of the loan within the preliminarily conditioned loan amount.

  • loan term 1 to 3 years;
  • the client makes free use of his assets within the stipulated credit limit to pay for his/her production and current needs.

A client who conducts international economic activity can issue multicurrency credit line. This will provide the opportunity to obtain the tranche in different currencies, with one outstanding debt on all tranches in single currency stipulated in the contract. All obligations in any currency under such contract have a single provision.

 

Version 4

Line of credit as a form of crediting

Line of credit is a directed crediting of economic entities’ commercial agreements with the usage of credit amount in increments within the established limit and during the time period defined by the credit agreement.

The advantages of crediting with line of credit technology for bank clients:

  • the client is given a possibility to use loan proceeds within the established limit directly in the moment of necessity which in turn allows lowering the expanses on loan service.

Non-revolving line of credit. The total value of proceeds granted during the operative time of non-revolving line of credit (the amount of payment on the debit of loan account) should not exceed the previously defined credit amount.

Revolving line of credit involves extending and returning the credit within the previously defined credit amount.

  • loan term is 1 to 3 years;
  • within the defined line of credit limit, the client freely operates the funds for paying his production and current demands.

Multi-currency line of credit can be ordered by a client who operates an international business activity. This would allow for receiving tranche in different currencies but with a single credit limit in all the tranches of same currency defined by the agreement. All the obligations in any currency defined by such agreements have a single cover.

 

Version 5

Crediting by way of credit line

Specifics and advantages

Line of credit is a goal-oriented crediting of commercial agreements of the economic activity agents using the total credit portion wise, within the fixed limit and during the time period set by the credit contract.

The advantages of credit line technology loan for the bank clients:

  • Within the set limit, a client is given a provision to use loanable funds right at the moment of necessity, which, in its turn, allows lowering the costs of loan servicing.

No revolving credit line – means that the general amount of cash provided during the no revolving credit line operation (the amount of cash pay-out on debit entry of loan) should not overdraw the previously specified amount of credit.

Revolving credit line provides the credit granting and replacement within the previously specified amount of credit.

  • The period of loan is from 1 to 3 years
  • Within the specified credit line limit, a client can freely operate with cash to pay his operating costs and current demands.

Multicurrency line of credit can be executed by the client who carries on external economic activity. This can provide an opportunity of obtaining tranche in different currencies, but with the single limit of indebtedness on all the tranches in the same currency stipulated by the contract.

Contractually, all the commitment in any currency have single guarantee.

 

Version 6

Loans in the form of a credit line

 

The credit line is targeted crediting of commercial agreements of economic entities using the sum of the loan amount, within the set limit and during the period of time determined by the credit agreement.

 

Credit advantages of under the credit line technology for bank customers:

• the client is given opportunity within the set limit use proceeds of credit directly at the emergence time of  requirement that, in turn, reduces the costs of servicing the loan.

 

Non-revolving credit line is the total amount granted for the duration of the non-revolving line of credit (the sum of issue funds charged to the loan) shouldn't exceed previously caused loan amount.

 

The revolving credit lines provide granting and return of the credit within previously caused.

• loan term is from 1 to 3 years;

• within the caused limit of a credit line, the client freely operates with means for payment of the production and current requirements.

 

Multicurrency credit line can issue a client who conducts foreign economic activity. It will provide possibility of receiving a tranche in different currencies, but with one debt limit on all tranches in one currency provided by the contract. All obligations in any currency under such contract have uniform providing.

 

Version 7

Crediting in the form of the credit line

 

Credit line is a commercial agreement purposeful crediting of the economic activity subjects by using the credit sum in parts, within the fixed limit and during the time, determined by the credit agreement.

The advantages of the crediting in the form of the credit line for the bank customers are the following:

·                  The customer gets a possibility to use the credit money within the fixed limit right at the moment of the requirement rise, which enables to reduce the credit service expenses.

Nonrenewable credit line is total volume of funds granted during the nonrenewable credit line operation (volume of funds as for the debit of loan account) and should not exceed the condition precedent amount of credit.

Renewable credit line foresees the extension and return of credit within the condition precedent amount of credit. 

·                  Period of loan is from 1 to 3 years.

·                  The customer executes operations with the funds freely for the payment for his production and current needs within the credit line conditioned limit.

Multi-currency credit line is available for the customer with the foreign-economic activity. This enables him to get the tranche in different currency, but with one limit of indebtedness for all tranches in one currency, foreseen in the agreement. All obligations in any currency according to this agreement have unified provision.

Here you can become familiar with basic list of needed documents.

 

Version 8

Loan services in the form of credit line

 

Credit line – goal-oriented crediting of commercial agreements of business subjects using loan amount installments within the established limit and time, defined by the loan contract.

Advantages of loan in the form of credit line for the bank’s clients:

  • customer is provided with the service of loan disbursement within the established limit directly at the time of demand occurrence, what in its turn allows lowering loan service expenses.

No revolving credit line - total amount of provided resources during the course of no revolving credit line (total disbursement amount in the debit loan account) not to exceed the previously arranged credit extent.

Revolving credit line - covers loan disbursement and reimbursement within previously arranged credit extent.

- 1 to 3 years loan term;

- client is able to freely operate funds for production and current demand coverage within previously arranged credit extent.

Multicurrency credit line can be issued to a client who is conducting international trade activities. It will provide the ability to obtain the tranche in a number of currencies, but with one debt limit for all tranches covered by agreement. All liabilities in any currency have unified support under such contract. 

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