My understanding is that it's contrasted with an "advised" line. An "advised" line involves a commitment to lend and the customer is advised of the commitment and terms. A "guidance" line is an internal agreement that a borrower is "good for" loans up to an aggregate number that is shared internally in the bank, but the customer is not formally notified. There is no commitment, so no "unused commitment" number needs to find its way to the bank's financials, etc.
The guidance line is helpful for junior lenders who aren't involved in the underwriting of a customer's credit, but may be called upon from time to time to authorize a note under a senior lender's "guidance" authority. This provides the customer with service when the senior lender isn't available.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8