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Glossary term

Line of Credit

Definition

A line of credit is a pool of borrowing you can draw from as needed, up to a set limit, instead of taking it all at once.

Technical definition

A line of credit is a revolving or non-revolving credit facility allowing a borrower to draw funds up to an approved limit, paying interest on the amount drawn.

Why it matters

Lines of credit fit the uneven timing of farm expenses, letting you borrow when costs hit and repay when revenue arrives.

Example

An operating line lets a rancher draw for feed in winter and repay after selling cattle.

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