The method
How it is worked out
Cost = drawn × rate + undrawn × fee + annual fee; effective = cost ÷ drawn
- undrawn fee
- Charged for keeping the facility available
Business Line of Credit Calculator
Estimate what a revolving business credit line costs for how you actually draw on it, against a fixed term loan. The result updates as you type so you can compare scenarios quickly.
Keep in mind
What it leaves out
- Draw feesSome lenders charge per draw.
- CovenantsLines can be cut at renewal; a loan cannot.
Use the calculator to compare scenarios rather than as a guaranteed forecast.
About the Business Line of Credit Calculator
Price a revolving credit line for how you actually use it, including fees on undrawn balances, and compare it with a term loan.
How it works and an example to tryShow less
How to use the result
Interest applies to the average drawn balance; the undrawn fee to the rest of the limit; annual fees are added. Effective rate divides the total by the drawn amount.
Example to try
A £50,000 line with £20,000 drawn at 14%, a 1% undrawn fee and £500 a year costs £3,600, an effective 18% on what is used. A £50,000 term loan at 10% would cost £5,000.
Put it to work
Try it on a real situation
Load an example
What moves the result most
Worked out from your figures above. Tap a row to try it.
Who uses it, and when
Owner-managers and finance leads choosing between a line, a loan or an overdraft.
Mistakes worth avoiding
- Comparing the line rate with a loan rate when you draw only a fraction of the limit.
- Forgetting undrawn and renewal fees.
- Using the line for long-term needs; lines can be cut at renewal.
Questions
What does the Business Line of Credit Calculator do?
Estimate what a revolving business credit line costs for how you actually draw on it, against a fixed term loan.
How should I use the result?
Interest applies to the average drawn balance; the undrawn fee to the rest of the limit; annual fees are added. Effective rate divides the total by the drawn amount.
Does TechBullion store the information I enter?
The core calculation or transformation runs in your browser. Normal website security and analytics may still record page-level events, but the tool does not need to create a public record from your inputs.
What mistakes do people make with a business line of credit calculator?
Comparing the line rate with a loan rate when you draw only a fraction of the limit. Forgetting undrawn and renewal fees. Using the line for long-term needs; lines can be cut at renewal.
Is the result guaranteed?
No. Use the result as a practical check or planning aid and verify important decisions with the relevant primary source, provider or professional advice.
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Results are estimates based on the figures entered, for general information only, and not financial, investment, tax or legal advice. See our terms of use.