Purpose of Line of Credit Clause Samples
The "Purpose of Line of Credit" clause defines the specific uses for which the borrower may draw funds from the line of credit. Typically, this clause restricts the use of borrowed funds to certain business activities, such as purchasing inventory, covering operating expenses, or funding capital improvements, and prohibits their use for unrelated purposes like personal expenses or speculative investments. By clearly outlining acceptable uses, this clause ensures that the lender’s risk is managed and that the credit facility supports the intended business objectives.
Purpose of Line of Credit. You have obtained this line of credit in order to finance your purchase of Goods for resale at retail unless otherwise agreed to by us in writing.
Purpose of Line of Credit. The line of credit hereunder can be used for Item (1) below. Without written consent of the creditor, the debtor is not allowed to use the loan for any other purpose.
Purpose of Line of Credit. The Borrower agrees to use the proceeds of the Loans solely as working capital and for general corporate purposes.
Purpose of Line of Credit. The Borrower agrees that the proceeds of the Line of Credit and each Line of Credit Advance obtained thereunder shall be used to support working capital and the general corporate purposes of the Borrower. The Borrower further agrees that no portion of the proceeds of the Line of Credit or any Line of Credit Advance obtained thereunder shall be used to purchase or carry any margin stock, to extend credit to others for the purpose of purchasing or carrying margin stock or for any purpose pro- scribed by Regulation G, Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.