Business Credit Cards & Business Loans

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Credit Lines & Business Credit Cards

What is a Line of Credit?

A line of credit is a type of credit where a bank is obliged to credit a client during a predefined period of time, either by allowing the customer to withdraw all of it at once or to make a number of small withdrawals. 

Is a Credit Line a Business Credit Card?

Although a line of credit is also sometimes called a credit line, the term “credit line” can be synonymous with “credit limit,” and can also be used to define the maximum amount of credit that a financial institution will extend to a client, or the maximum amount that a credit card company will allow a business credit cardholder to have on a single business credit card

 
The two concepts are highly interconnected and generally refer to the same sorts of agreements between financial institutions and their customers. A good example of both a line of credit and a credit line is a credit card. When you or your business is issued a credit card, you are extended a line of credit by the credit card company. This line of credit will have a credit line – or, more clearly, a credit limit. This will be the maximum amount of credit you are permitted to borrow from the institution. $500, $1500 or $10,000, for example, are common credit limits for personal and business lines of credit. 

Business Credit Cards and Lending

In most cases, the two terms can be used interchangeably. For example, you may refer to a business credit card as a line of credit, or a credit line. Or you may refer to the maximum amount of credit unavailable on an account to a line of credit or a credit line. Although there can be minute differences between the two terms, they typically reference the same area of lending.

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