An informal agreement that allows a company to borrow up to a prearranged limit without having to follow formal loan procedures and prepare paperwork is known as:
A)A line of credit
B)Commercial Paper
C)A debt covenant

Question

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A line of credit is an agreement between a company and a bank or other financial institution that allows the company to borrow up to a prearranged limit without having to follow formal loan procedures or prepare paperwork. This type of agreement is often used by businesses to manage cash flow, cover short-term expenses or take advantage of unexpected opportunities. It is a flexible and convenient financing solution that provides the company with access to funds when needed.

An Informal Agreement That Allows a Company to Borrow Up