Who can provide a Line of Credit?
- Banks: when banks provide a line of credit, it refers to the level of negative balance that clients are permitted to have in their account without risking reaching an overdraft.
- Financing firms: when the issuer is a non-bank lender, the line of credit represents the maximum financial commitments which the lender is willing to finance for its client.
How is a Line of Credit determined?
Line of credit agreements vary between clients and firms, according to a specific set of parameters:
- Collaterals – the lender assesses the quality and worth of collaterals that the client possesses.
- Financial record – the lender reviews the client’s credit reports and past performance. A clean slate without any claims or disputes will prompt the lender to provide larger lines of credit, and vice and versa.
- Revenues – the lender reviews the client’s average revenues. Higher and consistent revenues will prompt the lender to provide larger lines of credit, and vice and versa. In the past, banks and financing firms allowed their clients to exceed their lines of credit limits, which has led to imprudent financial conduct. Therefore, the Israeli law permitting lenders to respect its obligations towards borrowers who exceeded their line of credit limit has been changed, and today lenders and borrowers are obliged to adhere to the agreed line of credit.
Lines of Credit at Peninsula
We offer our clients an optimal line of credit, according to their financial records. Our service is quick, effective, simple, and flexible. We respect our clients' privacy, and integrity and mutual respect are key to our approach.