What exactly is the definition of an open-end line of credit? We own a business, and have had an open-ended line of credit set up for a couple of years now. In the last year or so my husband was out of commission with a bad back, had surgery, and is now back at work, in the meantime, it has caused us some financial difficulty but, untill now, nothing major. The bank, however, seems to be running scared. When I went to renew the line by paying the interest due, my banker refused to accept the money, or renew the line, and is now demanding that another 35000.00 dollar advance, also written up as an open-end line of credit, be paid via a pay increase from the general contractor that we sub under, which happens to be my parents. This is a very small town bank (population 600) and I have just learned there has been some gossip about my husband and I roaming around town, and my banker, recently discussed this with my dad, and expressed his concern. I have been in the bank twice with a check trying to renew the loan, and the president of the bank would not accept it, now after realizing that demanding payment on another loan wasn't going to magically produce money, they have reconsidered, and want me now to bring in the interest, which has grown from 10,000. to 12,000 and sum, and is no longer available to me. I feel like I'm living in the twilight zone, are there not some laws concerning this issue that I can fight back with? This is getting to the point where they are threatening to come and get our equipment. I would appreciate any help or advice you may have!
First, Welcome to the board. There are 2 PRIMARY CATAGORIES of contract. O - Open ended (anything that doesn't fall with #2) I - Installement Where the amt. of pmt and due date, and length of time is FIXED. There are a lot of different types of contract but I believe they all fall within one of these 2 catagories. That said: Your business credit line is complex. Time won't allow you to "catch up" on all the intricacies of all that's going on in time to resolve your situation. I suggest you go see an atty. right away. In your case it's tax deductable Now that said: (lol) As long as you've NOT been late on any pmt's (excluding those that were refused) I believe your situation may fall under Credit Discrimination law. For a bank to adjust your position negatively based upon mere rumor certainly would be grounds for a strong position for you. Contracts of this nature provide for Demand Upon Default. But it sounds like you've NOT defaulted. Moreover, since the banker "refused" pmts. I wonder if they will classify those as now LATE. What CRAP!
