Often a bank will require a company to pay off its line of credit (return the balance to zero)and keep it there for a specific period of time each year.For example,a requirement might be that the line of credit remains at a zero balance for at least one sixty-day period each year.This is called the clean-up period.

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This statement accurately describes the concept of a clean-up period, which is a common requirement for companies with a line of credit from a bank. During this period, the company must pay off the balance of the credit line and keep it at zero for a specific period of time, often 30, 60, or 90 days each year. This allows the bank to assess the company's ability to manage its finances and reduces the risk of default.

Often a Bank Will Require a Company to Pay Off