Unsecured line of credit.. will bank close?

I have an unsecured business line of credit that I received back in the good ol’ days for 100K, and I’m constantly hearing stories about folks who got there’s shut down. I have a balance close to the full 100 on mine, but I’m thinking about paying down about $25k. The loan is tied to prime and floats. What’s your take on this?.. The balance was around $75k 8 months ago when the loan was renewed, but they can close it down anytime. thanks…

An unsecured line of credit is not readily available, especially if the credit ratings of the company is not good enough.Since no guarantees in this process, lenders need to record the credit score you can repay the loan effectiveness. It becomes a risk to the lender in case if the money is not paid and the company goes bankrupt, then there is nothing that can benefit the lender.

WOW!! :anon

Does your loan have a balloon payment at the end of the loan term? If so, then if your business’ income is not high enough to support your loan payment, the lender will just let your balloon payment come due rather than renewing your loan.

If this is about to happen, the ability to pay down a significant portion of the balance may give you negotiating room to renew a portion of your loan rather than having the entire balance come due.