• A line of credit is an agreement between a lender and a borrower that provides more flexibility than traditional loans.
  • Types of lines of credit include revolving lines of credit, retail lines of credit (such as credit cards), guaranteed lines of credit, letters of credit, and most retail credit accounts.
  • A line of credit often allows a company to have greater control over the amount of debt, maturities, and use of funds than other types of loan arrangements.
  • However, a line of credit usually comes with debt, additional service fees, withdrawal fees, and is more difficult to secure.
  • The terms and conditions of lines of credit, such as credit cards or personal loans, depend on the financial condition of the borrowing business and its unique credit history.