Loans & payments
Business line of credit calculator
Estimate what a draw costs: the monthly payment, interest and draw fee when you repay it in equal monthly payments.
How this is calculated
Payment = D × r ÷ (1 − (1 + r)⁻ⁿ) · Fee = D × fee %
D = amount drawn · r = annual rate ÷ 12 · n = months to repay.
Worked example
Drawing $40,000 at 18% and repaying over 12 months: r = 1.5% a month, so the payment is $3,667.20. Interest comes to $4,006.40 and a 2% draw fee adds $800, for a total cost of $4,806.40.
Assumptions
- One draw at a fixed rate, repaid in equal monthly payments.
- Many lines charge a variable rate or allow interest-only payments, which change the cost.
- Annual or maintenance fees are not included.
Questions owners ask
Is a line of credit cheaper than a term loan?
It can be, because you only pay interest on what you draw. Rates and fees vary, so compare the total cost of the draw — interest plus fees — with a loan for the same amount.
What is a draw fee?
Some lenders charge a percentage each time you draw. It is paid up front, so it adds to the cost of every draw.
Can I draw again after I repay?
On a revolving line, repaid amounts usually become available again. Check your agreement for draw periods and limits.
Read before you borrow
Guides behind the numbers.
01Line of credit or term loan?
Compare a business line of credit vs. term loan by use, payment structure, cost, flexibility and cash-flow fit with practical examples.
Read the guide ↗
02How to choose the right financing for the job
Learn how to choose business financing by matching the use of funds, repayment structure, timing and risk to your company’s cash-flow cycle.
Read the guide ↗
03Business loan rates and costs: what you actually pay
Understand business loan rates, APR, factor rates, fees, payment frequency and total repayment so you can compare financing offers accurately.
Read the guide ↗Calculators give estimates for educational purposes only. They are not an offer, approval or commitment to lend. Actual rates, fees, terms and payments are set by independent providers and depend on their review. ScaleKit Financing is operated by Arch Ventures LLC and is not a lender.