Credit Line Agreement

This Credit Line Agreement is a basic contract offering simple terms for the issuance of

a line of credit. This document in its draft form contains numerous of the standard

clauses commonly used in these types of agreements, as well as optional language to

allow for customization to ensure the specific terms of the parties’ agreement are

addressed. It is ideal for use by small businesses or other entities requiring basic legal

protection.

CREDIT LINE AGREEMENT



This Credit Line Agreement is made as of this ___ day of _________, 20__ (“Credit Line

Agreement”), by and among _______________ (“Borrower”), whose address is

_______________________ and _________________ (“Creditor”), whose address is

____________________. This Credit Line Agreement establishes a line of credit in the amount of

____________ Dollars ($________) for Borrower. This line of credit will be subject to the

following terms and conditions:



1. Borrower hereby applies for a line of credit that can be replenished by payment on

amounts previously drawn. Borrower’s use of the line of credit establishes Borrower’s

agreement with these terms and conditions.



2. The credit limit approved shall be determined by the Creditor, and this line of credit will

be drawn upon ____________________________. [Instruction: Include a description

here of how the line of credit will be accessed.]



3. The line of credit will be repaid in accordance with ____________________________.

[Instruction: Include line of credit repayment guidelines here.]



4. Outstanding balances on this line of credit will bear interest at the rate determined

pursuant ____________________________. Instruction: Note here how the interest

rate for this line of credit will be determined.]



5. Borrower promises to pay any and all charges incurred by Borrower and by any person

Borrower authorizes to use the line of credit. Borrower further agrees to pay any fees

or charges assessed against Borrower for any services relating to this line of credit,

including, but not limited to, fees or charges incurred in retrieving transaction data or

monthly statements and any efforts to collect balances due on the line of credit

account.



6. Borrower understands that as holder of this line of credit, it can repay any outstanding

balance prior to maturity, in whole or in part, without penalty.



7. Borrower recognizes and agrees that Borrower will accept any other conditions

established by Creditor that are necessary to protect the best interests of Creditor and

to comply with applicable federal and state laws and regulations as they relate to the

extension of this line of credit.



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8. Borrower agrees that Creditor can change the terms of this agreement at any time. The

new terms will apply to all transactions relating to this line of credit, including, but not

limited to, cash advances, finance charges that accrue from line of credit balances, and

any applicable fees. The Creditor will mail or deliver written notice of any change in the

terms of this agreement unless Borrower has already agreed to the change, the change

involves late payment charges, over-limit charges or return payment fees, or the change

is a reduction of a finance or other charge.



9. Borrower acknowledges and agrees that Creditor may terminate this agreement under

the following conditions:



A. Upon adverse re-evaluation of Borrower’s credit worthiness;



B. Upon Borrower’s failure to satisfy the terms of this Credit Line Agreement and

any other conditions established by Creditor per the terms and conditions of this

Credit Line Agreement; and



C. At Borrower’s option or Creditor’s option with good cause.



10. If Creditor terminates Borrower’s line of credit, Borrower shall receive written notice of

such termination; however, Borrower understands and acknowledges that such

termination shall not affect Borrower’s obligation to pay any outstanding balance.



11. Borrower understands that Creditor will review Borrower’s line of credit file at least

____________________________. [Instruction: Include here the frequency with

which Borrower’s credit file will be reviewed.]



12. Borrower hereby gives permission to Creditor to investigate and reassess Borrower’s

credit worthiness.



13. Borrower understands that Borrower may need to re-apply for this line of credit if:



A. The credit limit is increased, or



B. The terms of payment are extended beyond the terms of this Credit Line

Agreement.





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14. Borrower fully understands and agrees that if any outstanding balances under this

Credit Line Agreement become delinquent or past due, Borrower’s line of credit issued

under this Credit Line Agreement shall be revoked, unless Creditor determines that

extenuating circumstances have contributed to the delinquency. Under such

c