Credit Line is a mechanism of financing when a borrower is able to disburse or repay credit resources periodically so that his cumulative liability to the Bank does not exceed the size of the credit line.
Credit line aims at satisfying the needs of a company for working capital to be used only for obtaining current assets or repaying short-term liabilities.
The credit lines are effectively used for financing the companies who periodically enjoy appearance of free monetary resources. The company’s ability to accumulate free resources must be evidenced through:
- High rate of turnover on Bank accounts;
- Stable balances on bank accounts.
- Minimum amount – $ 5 000
- Minimum period– 3 months;
- Liquidity value of guaranty – not less than 150% of a credit line amount*
Credit line Guaranty:
- Real estate and other fixed assets of a company;
- Working capital of a company;
- Private assets of the founders and managers of the company.
a) Credit line decreasing in size during last few months;
b) Credit Line decreasing in size each month.
*The issuance of money amount less than 200 000 GEL is possible only in national currency for private persons citizens of Georgia and individual entrepreneurs