Entering a line of credit

In this article

Best option to add a Line Of Credit or Credit Cards. Bank or Financial institute provides an arrangement so the customer can borrow the maximum loan amount that the bank has set a credit limit for him. They behave the same way: You have a credit limit, and you can draw money against that limit as you need it. Each payment you make is applied first to any interest charges, then to the outstanding principal.

Adding a line of credit:


Under the working capital tab of financial forecasting tool, Click on the Funding tab, and then click Add Funding Button:


Enter a name for the loan, and select funding type as Line Of Credit:


Enter the limit of the line of credit:


Indicate the starting balance on the line of credit as of the beginning of your forecast (if any):

Note: if you have no starting balance, enter zero.


Enter the annual interest rate, then click Save:


Click Save & Close


Enter the amount you plan to draw from this line of credit in each period:


Enter the amount that you plan to pay back in each period:

Where does this entry appear in the financial statements?

Similarly to a Loan entry, you'll only see the interest portion of your Line of Credit in the Profit and Loss. The interest is the only true cost your business incurs with a line of credit:

Because you can both use your Line of Credit and make a payment on it in the same month, the Balance Sheet will calculate the net debt that remains in each month. This amount is shown as part of the Current Liabilities, as Short-Term Debt:

In the Cash Flow, the net debt of your line of credit will calculate into the Change in Debt(Short-Term Debt):