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    9 Replies Latest reply on Jan 31, 2008 3:13 PM by CorpCons08

    Help with High Interest lines of Credit

    Green Biz Newbie
      Here is my story. I started a very small business and when I opened an account at Bank of America to be able to cash checks from my first sale. They offered me a line of credit which I originally planned to use only to purchase products and deliver to customers who ordered the product then immediatly pay it off when I was paid. I was then laid off from my day job in the home building industry when that bubble burst. So I began to rob Peter to pay Paul as I had just purchased my first home before I was laid off. So I had to pay the mortgage. I ran out money in my line of credit so I started using the high interest credit card they gave me without asking for it. The first line of credit was 11% the second was 25%. I am now having trouble paying the payments and because I was late my account manager tells me they can not do anything for me. Does anyone have any suggestions?
        • Re: Help with High Interest lines of Credit
          Ed O'Gee Adventurer

          Hey Greenbiz, sorry about the layoff. But the first thing and no offense is not to blame the bank. You made purchases on the line of credit and credit cards, so unfortunately you are responsible. Don't blame the bank for wanting their money, if you extended credit to a client and they used it, you'd want your money too.

           


          Now for what you should do:

           


          Bank of America like most banks hate to write off debt, they want to get paid and in most instances will work with you to get at least something, rather than writing off the entire debt, which doesn't look good on their balance sheet.

           


          Ask to speak to your account managers supervisor and explain the situation. If you lay out your finances and they realize you can't make the payments based on the current rates, they are likely to reduce the rates - even if its a short term rate reduction, it will help.

           


          If your account manager is unresponsive, speak to someone else. Bank of America is a huge company. Your account manager probably has 30 bosses over him/her. Speak to the right people, trust me someone at Bank of America will be smart enough to work with you.
          1 of 1 people found this helpful
          • Re: Help with High Interest lines of Credit
            CEO Space Scout
            Green Biz,

            Welcome to the forum.

            I am sorry that you got laid off.

            go to www.prosper.com

            It seems complicated but it really isn't. I would suggest you do not try to do it alone. You are more
            likely to be funded if you are in a group of people like you.

            It seems that people with decent credit scores who have gotten themselves in fixes get funded pretty quickly if in the right group. Of course, there are no guarantees.

            You also might consider this borrowing from Peter to pay Paul, but you can set it up so that
            you can afford it on prosper because you make the plan and others bid on it if they agree.

            I don't know what to total sum of money is and Prosper does have limits, but check it out.

            Good Luck

            Kathy
            1 of 1 people found this helpful
            • Re: Help with High Interest lines of Credit
              Green Biz Newbie
              Yes Ed O'Gee you are correct I can not blame the bank it was my own fault. I did contact the bank and my account manager told me because I have been late 4 times and most recently in December they would not lower my interest. I just do not understand with me being a Small Business and my line of credit being backed by the SBA why they would not work with me to lower my interest so that the payments would let me get out of debt sometime. My business can not continue giving all my profits to their high interest credit lines. I will try to contact the bank again and ask to speak with my account managers boss. I am thinking about going with Credit Solutions. What do you think about that?
              • Re: Help with High Interest lines of Credit
                CorpCons08 Ranger
                I hate to sound contradictory on here, but there is a few problems with the responses you have been receiving. Bank of America is not going to lower the interest rate on an SBA-backed loan. The rate was set based on what the offering was from the SBA. Your other solution would be to refinance the debt, however you have not explained to us the length of time you have been in business. If you are under 2 years of business management of this venture, you cannot refinance the SBA debt with another SBA loan. This is explained in the summary pages you received from the SBA. If you are over 2 years of business management of this venture, you may have the opportunity to convert both loans into a conventional bank business loan which has an interest rate typically between PRIME + 0% to PRIME + 5%. With the current prime rate at 6% (lowered substantially over the last few months), the maximum interest rate you would be looking at would be 11% (based on credit) and the payments would be more affordable. I would be happy to speak to you further if you would like. My email address is d.skolnick@skolnick-associates.com.

                Best wishes,

                CC08