Lines of Credit

A Line of Credit Agreement, rather than a Loan Agreement, may be used to document the amount of the line and the promise to repay amounts advanced under the line.  A piece of real estate can secure a line of credit.  See the Line of Credit Agreement located at the end of this Chapter.  As amounts are drawn a written Request for Advance should be executed by the borrower and delivered to the Bank.  See Request for Advance located at the end of this Chapter.  Upon receipt of a request, the Bank should review the loan to confirm that (i) the line of credit has not expired, (ii) the maximum amount of the line has not or will not be exceeded by the requested advance and (iii) the borrower is not in default under the Line of Credit Agreement.