credit-line

Vocabulary Word

Definition

A 'credit line' is a flexible loan from a bank or financial institution. Unlike a regular loan, you don't get a lump sum of funds but can borrow and repay funds up to the agreed limit at your convenience.

Examples in Different Contexts

In corporate finance, a 'credit-line' is used by businesses to ensure liquidity for operations or to finance short-term needs without taking out a traditional loan. A CFO might discuss, 'Our credit-line is a critical component of our capital management strategy, providing us with financial flexibility.'

Practice Scenarios

Finance

Scenario:

Our cash flow statement indicates a potential shortcoming in the coming quarter. We need to have a safety net in place for such requirements.

Response:

Having a credit line in place could provide us with the necessary financial flexibility during tough times.

Retail

Scenario:

We need to incentivize our loyal customers with exclusive perks. Let's brainstorm ways to reward their patronage.

Response:

Offering a credit line with special rewards could be a great way to appreciate and engage our frequent shoppers.