Line of Credit

An agreement by a financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

Commercial finance companies primarily write secured loans by requiring a lien on the company's assets. The loans can be of two types:

Revolving loan. The finance company commits itself to an overall line of credit; the borrower draws on the line as needed and then repays. This process is repeated for a period of up to two years, until the contract is terminated. Revolving loans usually finance seasonal fluctuations in cash flow.


Term loan. The finance company grants a loan for a period of from one to fifteen years with a defined amortization schedule.

The loan process for a finance company is very similar to that of a commercial bank. It includes an analysis of the background of the borrower, an evaluation of the loan collateral, advancement of funds on the basis of a negotiated percentage, and the establishment of monitoring and pay-down procedures.

Excel Capital LLC can assist in securing your business a line of credit.

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