I am the 100% Shareholder in a S-Corp that was established in 1990. I pay myself a usual and customary salary ($100K plus Health Fringe Benefit plus personal use of a leased business auto, or about $135 all subject to usual witholding taxes) for being a sales person. The full $14K in business assets (office furniture, etc.) has been expensed using section 179. Any additional income is pass through and distributions and can range from $0 to $40,000. As such, retained earnings are less than $1,000.

On the personal side, my home equity line of credit is about max'd out, but without credit card debt, so far. But, we no longer have the scholarship to pay my son's $50K yearly tuition.

My S-Corp business has a $100,000 line of credit backed by my vacation home that has about $200,000 in equity, but would be difficult to sell right now. The business does not owe any money on the loan. My tax advisor said the business could loan me money as long as the loan didn't bring retained earnings below zero. Well, that doesn't turn out to be very much at all.

My bank says it can't "exchange" the business loan for a personal one. How can I access this credit line? It seems to me that bringing retained earnings below zero is a lot better than missing a mortgage payment so I can make the tuition payments.