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
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
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
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
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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
circumstances, Creditor may approve Borrower’s continued use of the line of credit.
15. Borrower agrees that if Creditor must collect any amounts owed pursuant to this Credit
Line Agreement through an attorney or by other legal means or to take any actions in
bankruptcy court or other court in connection with this Credit Line Agreement,
Borrower will pay all costs, including reasonable attorney’s fees.
IN WITNESS WHEREOF, the Parties have executed this Credit Line Agreement as of
the day and year first written above.
[Instruction: Type name of debtor here.]
[Instruction: Type name of creditor here.]
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