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Resolution to Authorize Borrowing on a Line of Credit

Corporate Resolution Sample

A corporate resolution that authorizes borrowing on a line of credit is often referred to a borrowing resolution. This resolution indicates that the members (LLC) or Board of Directors (Corporation) have held a meeting and conducted a vote allowing the company to borrow a specific loan amount. The borrowing resolution states which officers are authorized within the company to borrow and the bank where the company may borrow this specific sum.

It is critical that a company prepares this corporate resolution, as the vote acknowledges that the company will go into debt from borrowing on a line of credit. If the vote does not pass, the borrowing resolution cannot be established and the company will be unable to borrow on a line of credit.

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Sample Corporate Resolution to Authorize Borrowing on a Line of Credit

(Text Only Version)

COMPANY NAME

Resolution to Authorize Borrowing on a Line of Credit

WHEREAS, this Corporation desires to borrow money, be it:

RESOLVED, that the proper officers of this Corporation are hereby authorized to borrow from the BANK NAME Bank, for and in behalf of this Corporation, a sum not to exceed MAXIMUM LOAN AMOUNT, (MAXIMUM LOAN AMOUNT NUMERICAL) on a promissory note maturing (NUMBER OF DAYS) days from the date hereof, to be signed by the proper officers of this Corporation, and to bear interest not to exceed the rate of INTEREST RATE percent, (INTEREST RATE NUMERICAL%) per annum, and with the additional privilege of renewing the balance of said loan at its maturity, for another period of NUMBER OF DAYS (NUMBER OF DAYS NUMERICAL) days, and the proper officers of this Corporation are hereby authorized and directed to sign any new or renewal note or notes required by BANK NAME Bank to carry out the provisions of this resolution, which new note or notes shall bear such rate of interest as shall be agreed upon between this Corporation and the BANK NAME Bank at the time of such renewal or renewals.

The undersigned hereby certifies that he/she is the duly elected and qualified Secretary and the custodian of the books and records and seal of COMPANY NAME,a corporation duly formed pursuant to the laws of the state of YOUR STATE and that the foregoing is a true record of a resolution duly adopted at a meeting of the DIRECTORS/MEMBERS and that said meeting was held in accordance with state law and the Bylaws of the above-named Corporation on MEETING DATE,and that said resolution is now in full force and effect without modification or rescission.

IN WITNESS WHEREOF, I have executed my name as Secretary and have hereunto affixed the corporate seal of the above-named Corporation this DAY OF THE WEEK, CURRENT MONTH of CURRENT YEAR.

SECRETARY NAME, Secretary


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What kind of information do I need to create a resolution to authorize borrowing on a line of credit?

The purpose of any corporate resolution is to document the actions the board of directors will take on behalf of a corporation. When you create a resolution to authorize borrowing on a line of credit, you need to include the following information:

  1. The legal name of the corporation
  2. The name of the bank where the corporation is authorized to borrow from
  3. Maximum loan amount that may be borrowed from the bank
  4. Interest rate (numerical)
  5. Officers of the corporation authorized to carry out provisions of this resolution
  6. The state where the business is formed
  7. Information about the directors/members
  8. The date on which the agreement to carry out said resolution is made
  9. The current day, month, and year when the agreement is signed
  10. Signature and date signed10. Signature and date signed

This resolution must document the actions that are authorized to be taken by the business and should be stored along with your corporate records.

Frequently Asked Questions

Power of attorney is a legal status. It may be granted to one person, known as the agent or attorney-in-fact, who has the power to act for another person known as the principal. The principal or the agent may sign a POA document to make decisions regarding the principal's property and finances. This document must be signed with a notary present.

Yes, a corporation may grant power of attorney. They may grant another professional or business, such as a law firm, the authority to execute deeds or additional documents on behalf of the corporation.

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