Posted by John Corey on September 29, 2006 at 10:27:18:
The line will be for a year in many cases. They can agree to extend, renew or offer a new line. Each year you will pay the set up fee.
Can you be more precise as to what terms are being offered? Is there an option to renew that you control or just an understanding that in a year the line will be reviewed and a new line might be offered?
If they make a multi-year binding commitment they have to put the loan in a different catagory for the regulators.
Commercial Line of Credit terms - Posted by Natasha(MD)
Posted by Natasha(MD) on September 28, 2006 at 15:05:46:
What is usually the going term for a commercial LOC secured to real estate? I am offered prime + 1.5 but The bank wants loan to be paid in one year. Is this normal? I thought as a line of credit there wouldn’t be a paid in full due date but perhaps renewal clauses. Thanks
Re: Commercial Line of Credit terms - Posted by Kurt Schultz
Posted by Kurt Schultz on September 29, 2006 at 17:29:11:
Hello, Natasha(MD):
The last BLoC I tried to arrange required that each drawdown be repaid within 90 days. The term of the loan arrangement itself was never discussed. Unfortunately, the deal blew up before I could get the Borrower and the Lender to sit down with each other.
Other business clients have had BLoCs that were open-ended, others yet have had BLoCs with annual renewal clauses.