A line of credit can be either a formal or an informal agreement between a borrower and a bank regarding the maximum amount of credit the bank will extend to the borrower during some future period, assuming the borrower maintains its financial strength.

Question

Quizplus · Accepted Answer

This statement accurately describes what a line of credit is. It can be a formal or informal agreement that outlines the maximum credit amount a borrower can obtain from a bank, assuming the borrower continues to meet certain financial criteria.

A Line of Credit Can Be Either a Formal or an Informal