(Solution document) What is a committed line of credit?

What is a committed line of credit?

  1. guarantees that a set amount of funds will be available to a firm for a stated period of time regardless of events that might occur during that time period.
  2. is a guarantee that a bank will purchase a firm's accounts receivable at full value.
  3. Provides greater assurance than a noncommitted credit line that funds will be available when needed by a firm.
  4. guarantees that any funds borrowed during a stated period of time will be charged the lowest rate of interest the lending bank offers to any of its customers.


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