My business line was cancelled

[Tomew2000]

I had a 50k line of credit, which was maxed out too long, and cancelled this morning.  I went to my bank and it’s described as a “term out”.   They tell me there’s no getting it back.  Now the big questions

1) Is that typically a big negative on your score?

2) I’m very concerned Amex sees it.  That’s my main card. Is this something likely to raise their red flags?  

3) Anyone with experience in this?   How did it affect your personal credit?

[FinStar]

Was this reporting on personal CRs or on any business CRs? Is it still maxed out or paid?

[Tomew2000]

It’s never appeared on my personal profile.  It’s maxed out and being referred to by Citibank as a term out.   There’s never been a delinquency or late payment    The gentleman at the business banking department tells me it shouldn’t affect.  Im skeptical 

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@FinStar wrote:
Was this reporting on personal CRs or on any business CRs? Is it still maxed out or paid?

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[Creditaddict]

N, citi does not report business accounts until very delinquent!

[redpat]

This is called "Evergreen", when a credit line is always maxed out and never put to zero for a 30 day period within a year before renewal.  What they did is normal course of business and made the credit line a term note.  This will not should up on your personal credit files.

Credit lines should be used for working capital,  the timing of your accounts rec. for instance and not used for buying equipment, vehicles or other fixed assets.

[Tomew2000]

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@redpat wrote:

This is called "Evergreen", when a credit line is always maxed out and never put to zero for a 30 day period within a year before renewal.  What they did is normal course of business and made the credit line a term note.  This will not should up on your personal credit files.

Credit lines should be used for working capital,  the timing of your accounts rec. for instance and not used for buying equipment, vehicles or other fixed assets.

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Thanks for the feedback.   Very much appreaciated.    I did some fast research, actually found one of the business bankers very helpful.   But his info echoed yours.  

    Now I’m waiting for the payout schedule.  Any idea of a reasonable schedule on this?  48 months sound right?

[sccredit]

In my experience with Citi it should be 60 months

[redpat]

Up to 60 months.

[Tomew2000]

Thanks everyone!

[Anonymous]

The general rule is that lines of credit should be paid to zero at least once a year.  If you don't do that your bank will consider it 'evergreen' and will convert it to a term loan.  That's what they mean by termed out.  This is very common because they want you to start paying down the principal instead of just paying the interest.