Explain why banks normally include a cleanup provision in a line of credit agreement.

Question:

Explain why banks normally include a “cleanup” provision in a agreement.

Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...