Investopedia

Continue to Site »

Commercial Credit

Filed Under » ,
Dictionary Says

Definition of 'Commercial Credit'

A pre-approved amount of money issued by a bank to a company that can be accessed by the borrowing company at any time to help meet various financial obligations. Commercial credit is commonly used to fund common day-to-day operations and is often paid back once funds become available.

Also commonly referred to as a "commercial line of credit" or "business credit"
Investopedia Says

Investopedia explains 'Commercial Credit'

Commercial credit is often used by companies to help fund new business opportunities or to pay for unexpected charges. For example, imagine that XYZ Manufacturing Inc. has the chance to buy a piece of much needed machinery at a deep discount. Let's assume that the piece of equipment normally costs $250,000, but is being sold for $100,000 on a first-come, first-serve basis. In this example, XYZ Manufacturing could access its commercial credit agreement to get the required funds immediately. The firm would then pay the borrowed amount back at a later date.

Articles Of Interest

  1.

    The Impact Of An Inverted Yield Curve

    Find out what happens when short-term interest rates exceed long-term rates.

  2. Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.

  3. Making It Big On Wall Street

    Read about some of the most glamorous Wall Street jobs and what it takes to land one.

  4. Mezzanine Financing

    Learn about this alternative method of financing companies use to finance expansion.

  5. Why Making Minimum Payments Gets You Nowhere

    Getting out of debt can be difficult, but paying off a minimum balance each month only makes things worse.

  6. Canada: A New Frontier For Real Estate Investors

    This property market is easy to access and provides profitable opportunities.

  7. Additional Streams Of Income For Seniors

    Find out how a reverse mortgage can work in your favor during retirement.

  8. How To Get A Credit Card Despite Bad Credit

    Prepaid credit cards and secured credit cards are both excellent options for getting a credit card despite having a poor credit rating.

  9. How HELOCs Can Hurt You

    A home equity line of credit is a convenient way to borrow money. But, there are things to be cautious about before you get into trouble.

  10. Investing In Credit Card Companies

    This investment requires keeping an eye on consumer indexes and the overall health of the economy.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  2. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  3. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  4. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center