Line of Credit

Unlike a traditional term loan, where a lump sum of money is repaid over a fixed period, a revolving line of credit provides access to a pool of funds that can used as needed, repaid, and then borrow again, much like a revolving door.

Here are some key features of a revolving line of credit:

1. Credit Limit: total amount that can be borrowed on the line of credit.
2. Drawdowns: funds from the line of credit can be accessed at any time, up to the credit limit. Drawdowns are disbursed via ACH to your desired destination bank account. Also commonly referred to as withdrawals.
3. Repayments: Regular payments based on the outstanding balance, the interest rate, and the terms of the agreement must be maid. Unlike term loans, where a fixed monthly installment is due, the minimum payment on a revolving line of credit depends on the balance and the minimum payment (as a percentage of principal due) set in the credit agreement.
4. Revolving Nature: As payments are maid on the borrowed amount, the funds become available to borrow again. This makes a revolving line of credit a flexible and reusable source of financing. Pier also supports non-revolving lines of credit
5. Interest Charges: Interest is charged only on the outstanding balance of the line of credit. Paying off the balance promptly minimizes the interest costs.