Business Loan Calculators

Business Line of Credit Calculator

A business line of credit allows borrowers to have easy access to money on an as-needed basis. This flexibility is extremely beneficial for businesses as it affords them the luxury of drawing capital to handle any unexpected emergencies, cash flow gap, inventory need or other business necessity. Calculate your monthly payments on the withdrawn amount using our business line of credit calculator. While a line of credit may seem similar to a credit card, the distinction between a credit card and a line of credit is that the borrower gets access to physical cash with starting APRs that are much lower than those of business credit cards. Traditional business loans charge interest on your total loan amount, but business lines of credit allow you to borrow only what you need, when you need it, up to a set credit limit.

How does a business line of credit work?

A business line of credit provides a lump sum of funding that you can draw from whenever your business needs funds. Your credit limit could range from as little as $1,000 to as much as $250,000. A business line of credit is typically revolving, which means the full amount would become available again after you repay the amount you withdraw.

You can find business lines of credit from traditional financial institutions, like banks, as well as online business lenders. Online lenders often have more lenient requirements than banks and faster time to funding, though repayment may be quicker and the cost of financing higher.


Each withdrawal you make from your line of credit would come with its own repayment terms. Typically, you’d have between 12 weeks and 24 months to repay the amount that you borrow, plus any interest or fees. Some lenders collect weekly payments, while others offer monthly payment plans. Repayments usually begin right after you make a draw from your credit line. This quick repayment schedule makes business lines of credit well-suited for short-term or immediate expenses.


Unlike small business loans, interest on a business line of credit only applies to the funds you actually use. Interest is incurred when you make a withdrawal from your credit line and is applied to that individual amount. Average interest rates for a business line of credit could be between 8% to 80% APR or more, depending on factors such as your lender, creditworthiness and business performance. An average starting rate for a credit card is around 16%.


A line of credit may come with fees that are added on to the total loan amount, similar to traditional loans. Depending on the lender, it may add maintenance fees, draw fees, or both. Maintenance fees are typically added to sustain an account that may or may not be in use. Draw fees, on the other hand, are charges that could be applied if a borrower draws against the limit. If you make a late payment, you may be charged a late fee as well.

Using the business line of credit calculator

If you’re considering a line of credit for your business, use the business credit line calculator above to estimate how much you can afford to borrow. Think about the amount you’ll initially need before pursuing this type of financing. It’s best to know upfront how much money you need to cover a particular business expense, plus how long it may take to pay that money back. Excessive borrowing against a line of credit and delaying payments can lead to trouble, such as late payment fees.

Here’s how to use the business line of credit calculator:

  • Step 1: Type in the amount of money you’d like to borrow from a business line of credit. This field reflects a single withdrawal, not your full credit line.
  • Step 2: Plug in an interest rate.
  • Step 3: Select a repayment term. Remember that each withdrawal from a business line of credit typically comes with a term between 12 weeks and 24 months.

The result should show you the amount you would have to pay on a monthly basis until the end of the term. Play around with the numbers to come up with a realistic monthly payment you would feel comfortable paying. Having an idea of what it’ll take to get to a realistic monthly payment would help you negotiate terms with a lender.

Considerations for the business line of credit calculator

As discussed earlier, business lines of credit can come with many fees, which are not included in our revolving line of credit calculator. Fee structures often vary by lender. For example, one lender may apply a $20 maintenance fee, but won’t apply draw fees. Another lender, on the other hand, may calculate a percentage of the borrower’s draw amount and will apply that to the overall loan amount as an origination fee.

All in all, it’s best to compare lenders before making the final decision to apply for a line of credit for your business.