demand line of credit

Definition

An arrangement wherein a bank agrees to let a firm or an individual borrow on demand. The borrower is not obliged to take out a loan from the bank but he may do so if he demands it, provided, that he does not exceed the maximum amount allotted to him.

Use this term in a sentence

They had a demand line of credit and I thought it was cool that we could borrow on demand like that.

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The demand line of credit for the individual was exercised to the maximum as the individual wanted to invest with his broker's expertise.

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The firm was particularly happy when they were established enough to be able to borrow money to a set amount from the bank without taking out a loan each time, by using their demand line of credit.

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