Sub-Limit

Last Updated: Jun 7, 2019

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A sub-limit represents a limited portion within an overall capital structure or credit facility. Sub-limits generally represent (1) a limited portion of an overall credit facility that is available for a certain purpose or type of loan, such as a limit on the amount of letters of credit that can be issued under a revolving credit facility; or (2) in the context of an overall borrowing base or collateral formula, a limit on the amount that can be attributable to a certain asset class (such as inventory).