Business Credit Line Interest CalculatorFree online financial calculator — instant results, no sign-up
Estimate interest and an unused-line fee from constant average balances.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Business Credit Line Interest Calculator
The Business Credit Line Interest Calculator estimates interest on an average drawn balance and a fee on the unused portion of a business credit line. It uses constant average balances, annual rates, and a 365-day year to estimate financing costs for the number of days you enter.
- Credit limit ($)
- The total available borrowing capacity of the business credit line, in dollars, with a default of $100,000.
- Average drawn balance ($)
- The average amount borrowed during the period, in dollars, with a default of $40,000.
- Annual interest rate (%)
- The annual rate charged on the drawn balance, entered as a percentage, with a default of 9%.
- Annual unused-line fee (%)
- The annual fee rate charged on the unused portion of the credit limit, entered as a percentage, with a default of 0.5%.
- Period (days)
- The length of the estimation period, in days, with a default of 90.
Formula and method
U = L − B; I = B × (r / 100) × (d / 365); F = U × (f / 100) × (d / 365); T = I + F.
- LCredit limit in dollars.
- BAverage drawn balance in dollars.
- UAverage unused credit in dollars, equal to the credit limit minus the average drawn balance.
- rAnnual interest rate entered as a percentage.
- fAnnual unused-line fee rate entered as a percentage.
- dPeriod length in days.
- IEstimated interest for the period in dollars.
- FEstimated unused-line fee for the period in dollars.
- TEstimated total financing cost for the period in dollars.
Subtract the average drawn balance from the credit limit to find average unused credit. Convert each annual percentage rate to a decimal and prorate it by days divided by 365. Apply the interest rate to the drawn balance and the unused-line fee rate to unused credit, then add the unrounded charges and display dollar results to two decimal places. With the defaults, unused credit is $100,000 − $40,000 = $60,000; interest is $40,000 × 0.09 × 90 / 365 = $887.67; the unused-line fee is $60,000 × 0.005 × 90 / 365 = $73.97; and total financing cost is $961.64.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Credit limit100000 $
- Average drawn balance40000 $
- Annual interest rate9 %
- Annual unused-line fee0.5 %
- Period90 days
Results
- Interest$887.67
- Unused-line fee$73.97
- Total financing cost$961.64
How to use the Business Credit Line Interest Calculator
- 1Enter your credit limit in dollars; the default is $100,000.
- 2Enter your average drawn balance for the period; the default is $40,000, and the balance should not exceed the credit limit.
- 3Enter the annual interest rate and annual unused-line fee as percentages; the defaults are 9% and 0.5%.
- 4Enter the period in days; the default is 90.
- 5Review the estimated interest, unused-line fee, and total financing cost, and compare the assumptions with your credit agreement.
Reading your result
Interest is the estimated charge for funds borrowed during the selected period: $887.67 with the defaults. Unused-line fee is the estimated charge for keeping the undrawn credit available: $73.97 with the defaults. Total financing cost adds these two charges: $961.64 with the defaults. It is a dollar cost for the selected period, not an annual percentage rate or a payment amount, and it does not include principal repayment.
Limitations
This estimate assumes a constant credit limit, constant annual rates, and constant average balances over the period. It uses simple prorated charges on a 365-day basis, without compounding or capitalization of fees. Actual agreements may use a 360-day basis, daily balance calculations, utilization tiers, minimum fees, or different definitions of unused credit. Origination fees, draw fees, late charges, and other costs are excluded. Use nonnegative inputs and an average drawn balance no greater than the credit limit. Results are estimates, not a lender payoff quote or billing statement.
Common questions
Why does the calculator charge a fee on credit I have not borrowed?+
Some business credit agreements charge for maintaining unused borrowing capacity. This calculator applies the annual unused-line fee to the credit limit minus the average drawn balance. With the defaults, that is $60,000 of unused credit and a $73.97 fee over 90 days.
Should I enter my current balance or my average drawn balance?+
Enter the average drawn balance for the full estimation period. If balances change, a day-weighted average better represents borrowing over that period than a single current balance. With a fixed limit and rates under this simple model, it also gives the corresponding average unused credit.
What if my business credit line has no unused-line fee?+
Enter 0% for the annual unused-line fee. The unused-line fee output will be zero, and total financing cost will equal the estimated interest.
Why might my lender's interest charge differ from this estimate?+
The calculator uses days divided by 365 and assumes a fixed annual interest rate. Your lender may use a 360-day basis, rate changes, different balance timing, or additional charges. Check the interest and commitment-fee provisions in your credit agreement.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
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Results are estimates for informational purposes and are not financial, medical or legal advice.