Although the bank may issue a line of credit to a business firm for a certain amount,the bank does not guarantee that the funds will be available when requested.

Question

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A line of credit is not a guarantee of funds availability. It is simply a pre-approved amount that the business can borrow up to if needed. The actual borrowing is subject to approval and availability of funds at the time the business requests it.

Although the Bank May Issue a Line of Credit to a Business