This free calculator from Silvershore Funding Group, a small-business funding broker in Flagstaff, Arizona, shows the monthly payment, total interest and total repaid on a line of credit draw repaid in equal monthly installments, using the rate and term from an offer. Interest on a line is charged on what you draw, not the limit. Results are arithmetic only, not a quote.
What this calculator works out
Interest on a line of credit is charged on the drawn balance, not on the limit. If a business has a hypothetical $25,000 limit and has drawn $7,300, interest runs on $7,300. So the useful question is not "what does the line cost?" but "what will this draw cost, and what will it take each month to pay it back?"
The calculator answers that for one draw repaid in equal monthly installments. It shows the monthly payment, the total interest over the repayment period, and the total repaid.
Which number goes in which box
- Amount: the draw you are planning, or the current balance you want to pay down.
- Interest rate: the annual note rate written in your offer or agreement. If your rate is variable, use today's rate and remember the result will change when the rate does.
- Term: the number of months over which you plan to repay this draw, or the repayment period the agreement sets for draws.
If your line charges interest only
Many lines require only interest during the draw period, with principal due later. In that case the monthly payment while you are drawing is roughly the balance multiplied by the annual rate, divided by twelve, and the balance does not fall unless you pay extra. Run the calculator with the repayment period that starts after the draw period ends to see what the payments will become.
The difference matters. Interest-only payments look light, but a balance that never falls keeps costing interest every month and leaves less of the limit free for the next need.
What the result leaves out
- fees to open, renew or draw on the line, or fees on the unused limit;
- changes to a variable rate;
- new draws made while you are repaying this one;
- how the partner actually calculates interest, such as daily accrual, which can make small differences.
Treat the figures as a sketch of the arithmetic. The partner's agreement, not this page, sets the real rate and terms.
Revolving lines and repeated draws
On a revolving line, each repayment frees part of the limit to be drawn again, so a business may carry several overlapping draws. Run each draw separately and add the payments together. Our explainer on revolving vs. non-revolving lines shows how the available limit moves in each case, and the business line of credit page covers how partners review lines. More tools are in the guide library.
By Silvershore Funding Group · Updated