A written,legally binding agreement that obligates the bank to lend a firm any amount up to a stated maximum,regardless of the financial condition of the firm (unless the firm is bankrupt)as long as the firm satisfies any restrictions in the agreement is called:

Question

Quizplus · Accepted Answer

A committed line of credit is a written, legally binding agreement that obligates the bank to lend a firm any amount up to a stated maximum, regardless of the financial condition of the firm (unless the firm is bankrupt) as long as the firm satisfies any restrictions in the agreement. This is different from an uncommitted line of credit, which is not a legally binding agreement and does not require the bank to lend any money.

A Written,legally Binding Agreement That Obligates the Bank to Lend