Line of Credit Agreement
A line of credit agreement is a contract establishing a revolving credit arrangement in which a lender agrees to make funds available to a borrower up to a set credit limit, allowing the borrower to draw, repay, and redraw funds over time while paying interest on the outstanding balance. Use this when a lender agrees to make funds available to a borrower on a revolving basis — up to a fixed credit limit, with draws and repayments over time — rather than a single lump-sum loan. This is a starting draft only, not legal or tax advice; revolving credit arrangements can raise lending-license and interest-rate-limit issues that vary by jurisdiction, so have a lawyer review the final terms before signing.
What's included
A ready-to-use line of credit agreement with signature fields already placed for Lender and Borrower. Fill in the bracketed details (like [Company Name] or [Date]) using Docracy's built-in text editor, then send it out for signature.
This is a general template for informational purposes only and does not constitute legal advice. Consult a qualified attorney to review it for your specific situation and jurisdiction before use.
Key clauses
- Credit limit and revolving draw mechanics
- Interest rate and calculation method on outstanding balance
- Draw request and repayment procedures
- Fees, such as commitment, draw, or unused-line fees
- Events of default and remedies
- Term and termination or renewal of the credit line
What you'll fill in
[Lender Name][Borrower Name][Credit Limit Amount][Interest Rate][Draw Period][Repayment Terms][Effective Date][Maturity/Termination Date]Legal summary
Signing a line of credit agreement legally obligates the lender to make funds available up to the agreed credit limit and obligates the borrower to repay amounts drawn plus interest according to the agreed schedule. Unlike a single lump-sum loan, funds can be drawn and repaid repeatedly during the term, with interest generally charged only on the outstanding balance. Because revolving credit arrangements can raise lending-license and interest-rate-limit issues that vary by jurisdiction, the final terms should be reviewed by a lawyer before signing.
Free for up to 2 signers, no account required. Need unlimited? Flat $10/month.
FAQ
Is this Line of Credit Agreement legally binding?
Signing through Docracy uses a simple electronic signature (SES), which is legally recognized for everyday business agreements under laws like the U.S. ESIGN Act and the EU's eIDAS regulation. This is a general template, not legal advice — for high-stakes or regulated agreements, have a qualified attorney review it for your situation.
Who needs to sign this Line of Credit Agreement?
This template includes signature fields for Lender and Borrower — already placed, so you just fill in the details and send.
Can I edit this Line of Credit Agreement before sending it?
Yes — Docracy's editor lets you edit the text, add or remove signature fields, redact sections, and reorder pages before you send it.
Do I need an account to send this Line of Credit Agreement?
No — it's free for up to 2 signers with no account required. Create a free account only if you want to save it to a dashboard or reuse it later.
Try it with an AI assistant
Paste one of these into ChatGPT, Claude, or your assistant of choice:
“Explain how a revolving line of credit differs from a term loan.”
“What terms should I negotiate in a line of credit agreement between two small businesses?”
“Generate a filled line of credit agreement using this template between two small businesses.”
Why teams start with Docracy
“Docracy is a great product that I have tested and am using. It is easy to use, has good tools, is always up to date, and implements new features. Highly recommended.”— DACH Advisory
Free for up to 2 signers, no account required. Need unlimited? Flat $10/month.