Revolving credit lines can be a valuable asset to any business. These loans can come in the form of credit cards or business lines of credit. They can be used to purchase inventory, supplies and cover overhead. They are flexible, too, so they can be borrowed against, repaid, and re-accessed once more. In many cases these loans are used for short-term investments when cash is tight. However, if you get stuck with an overwhelming, high-interest line of credit, you need to take steps to change the terms on that loan--especially if you have credit outstanding.
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Ask your current lender for a lower rate. There is no harm in asking, and you might be pleasantly surprised with the results. However, before you make the call, collect a copy of your business reports (last four quarters) with earnings and a copy of your business credit rating. These will help you argue your case.
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Pay more than the minimum payment due on the revolving account. It might seem obvious, but a large line of credit (or a business line of credit) is quite similar to a credit card--just with a larger credit limit. The minimum payment will not cover much interest due at all. To pay the loan faster, you need to pay more than the minimum.
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Ask your lender for a lower credit limit. Most lenders will raise your credit limit when they determine you or your business are a sound credit risk. You can, however, get this limit lowered to remove the temptation of incurring more debt than you can manage.
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4.
Look for new lenders for refinance offers. Before doing this, take a thorough look at your earnings statements and tax returns. Only a solid business showing profitability and growth will qualify for a refinance on a line of credit. Look at local banks and credit unions first as these companies are more likely to offer the most competitive programs.
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5.
Change your revolving loan into a closed-end loan. Most revolving credit agreements come with this provision. While it is normally exercised only when a borrower is about to default, you can contact your lender and ask for the switch. This will rearrange the payments and balance and put you on an installment plan for a set number of years.
