Business Line of Credit Calculator
Calculate monthly payments, total interest, and costs for your business line of credit. Compare interest-only vs. principal & interest options and simulate credit usage.
LOC Payment Formula
💰 Loan Details
💵 Fees (Optional)
📊 Payment Summary
Monthly Payment
$2,307.25
Principal + Interest • 24 months
Total Interest
$5,374
Total Fees
$1,500
Cost Breakdown
📊 Business Line of Credit Rate Guide
| Lender Type | APR Range | Credit Limit | Min Credit Score | Funding Speed |
|---|---|---|---|---|
| Traditional Bank | 7% - 12% | $50K - $250K+ | 680+ | 2-4 weeks |
| Credit Union | 6% - 10% | $25K - $100K | 660+ | 1-3 weeks |
| Online Lender | 12% - 25% | $10K - $250K | 600+ | 1-3 days |
| SBA Line of Credit | 7% - 10% | $50K - $500K | 680+ | 3-6 weeks |
| Fintech/Alternative | 15% - 40% | $5K - $100K | 550+ | Same day |
* Rates and terms vary based on creditworthiness, revenue, and business history. As of 2024-2025.
💼 Understanding Business Lines of Credit
How It Works
A business line of credit is revolving credit—you're approved for a maximum limit and can draw funds as needed. Unlike a term loan, you only pay interest on what you borrow, not the full limit. As you repay, that credit becomes available again. This makes it ideal for managing cash flow gaps, inventory purchases, or unexpected expenses.
Interest-Only vs. Principal & Interest
Many lines of credit offer a "draw period" (often 1-2 years) where you can make interest-only payments. This keeps payments low but doesn't reduce your balance. After the draw period, you enter the "repayment period" with higher P&I payments. Some lenders require P&I from day one. Interest-only is great for short-term needs; P&I builds equity faster.
Fees to Watch For
Beyond interest, watch for: Draw fees (1-3% per withdrawal),origination fees (0-2% upfront), annual/monthly maintenance fees, and inactivity fees if you don't use the line. Factor these into your total cost when comparing offers. A lower rate with high fees may cost more than a higher rate with none.
📐 Quick Payment Examples
$50K @ 10%: $417/mo (I/O)
$75K @ 12%: $750/mo (I/O)
$100K @ 8%: $667/mo (I/O)
$100K @ 8% 24mo: $4,523/mo (P&I)
I/O = Interest-Only • P&I = Principal + Interest
✅ Best Uses
- Managing cash flow gaps
- Seasonal inventory purchases
- Covering payroll timing
- Emergency business expenses
- Short-term growth projects
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Frequently Asked Questions
A business line of credit payment is calculated based on the amount you draw (not the total limit), the interest rate, and repayment term. For interest-only payments, multiply your balance by the annual rate divided by 12. For example, $50,000 at 8% APR = $50,000 × (0.08 ÷ 12) = $333.33/month. For principal + interest payments, use the amortization formula which spreads both principal and interest over your term.
Interest rates on a $50,000 business line of credit typically range from 7% to 25% APR depending on your credit score, business revenue, and time in business. Banks offer 7-12% for well-qualified borrowers, while online lenders charge 12-25%. At 10% APR, interest-only payments would be $417/month, while a 24-month P&I payment would be $2,307/month.
Business line of credit limits typically range from $10,000 to $250,000, based on annual revenue (usually 10-20% of revenue), credit score (650+ preferred), time in business (1+ years), and cash flow. Startups may qualify for $10,000-$50,000, while established businesses with $500K+ revenue can access $100,000-$250,000 or more.
For a $400,000 business line of credit at 7% APR: Interest-only payment = $2,333/month. With a 60-month term (P&I), payment = $7,920/month, total interest = $75,200. With a 120-month term, payment = $4,644/month, total interest = $157,280. Longer terms mean lower payments but significantly more total interest paid.
Interest-only payments mean you only pay the interest charges each month, not the principal. Your balance stays the same until you make extra payments. For a $50,000 draw at 10% APR, interest-only = $417/month. This keeps payments low but means you never pay down the debt unless you pay more than the minimum. It's common during the 'draw period' of many lines of credit.
A revolving line of credit lets you borrow, repay, and borrow again up to your credit limit. You only pay interest on what you draw, not the full limit. As you repay principal, that amount becomes available to borrow again. For example, with a $100,000 limit, if you draw $30,000 and repay $10,000, you'd owe $20,000 and have $80,000 available. This flexibility makes it ideal for managing cash flow.
💼 Disclaimer: This calculator provides estimates for educational purposes only. Actual rates, fees, and terms vary by lender and depend on your creditworthiness and business profile. Always review loan documents carefully before accepting any financing offer.