Business Line of Credit Cost Calculator for 2026

Calculate the true cost of a business line of credit including interest on your drawn balance, draw fees, origination fees, and maintenance fees.

Mathematical Audit

How Business Line of Credit Costs Are Calculated

Interest accrues only on the amount you actually draw, not your full credit limit. Total cost adds that interest to any draw, origination, and maintenance fees your lender charges.

Period Interest Cost = Average Drawn Balance × Annual Interest Rate × (Period Months ÷ 12)
Draw Fee Cost = Average Drawn Balance × Draw Fee %
Origination Fee Cost = Credit Limit × Origination Fee % (one-time)
Total Cost = Period Interest Cost + Draw Fee Cost + Origination Fee Cost + (Annual Maintenance Fee × Period Months ÷ 12)

Interest is typically calculated using the average daily balance method: APR ÷ 365 applied to the outstanding balance each day. This calculator approximates that using your average drawn balance over the period. Well-qualified businesses with strong credit typically see 7%–12% APR from banks, while online lenders can range from 8% up to 60%+ for higher-risk borrowers.

Operational Guide

How to Use the Business Line of Credit Cost Calculator

1

Enter your Credit Limit

The total revolving credit line your lender has approved.

2

Enter your Average Drawn Balance

The average amount you expect to have outstanding over the period — not your full limit.

3

Enter the Annual Interest Rate (APR)

Your quoted rate — fixed or variable, whichever your lender offers.

4

Enter fees

Draw fee (charged per withdrawal), origination fee (one-time, on your credit limit), and annual maintenance fee.

5

Set the Period

How many months you want to project the cost over.

Real-World Scenario Example

"A business has a $100,000 credit line, keeps an average of $40,000 drawn at 12% APR, with a 1.5% draw fee, 1.5% origination fee, and a $150 annual maintenance fee, over 12 months."

Inputs

creditLimit:100000
averageDrawnBalance:40000
annualInterestRate:12
drawFeePercent:1.5
annualMaintenanceFee:150
originationFeePercent:1.5
periodMonths:12

Result

Interest Cost = $4,800, Draw Fee = $600, Origination Fee = $1,500, Maintenance Fee = $150, Total Cost = $7,050 — an effective APR of about 17.6% on the drawn balance.

Important Disclaimer

This calculator provides an estimate using an average-balance approximation. Actual interest charged depends on your lender's exact daily balance method and draw/repayment timing, so confirm precise terms with your lender.

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E-E-A-T Genuineness

Sources & References

NerdWallet — Business Line of Credit Calculator

https://www.nerdwallet.com/business/loans/calculators/business-line-of-credit

Bankrate — Average Business Line of Credit Interest Rates

https://www.bankrate.com/loans/small-business/average-business-line-of-credit-rates/