Understand the Real Cost of Borrowing — Instantly.
Use our Business Line of Credit Calculator to see interest, fees, and payoff totals before you borrow. Perfect for small business owners who want clarity, confidence, and control over their cash flow.
A business line of credit is a flexible type of financing that works like a credit card but is designed for businesses. Instead of receiving a lump-sum loan, the business gets access to a set credit limit (say $50,000). The company can draw money as needed, repay it, and borrow again, as long as it stays within the limit.
Unlike a traditional loan, you only pay interest on the amount you actually borrow—not the entire credit limit.
Business Line of Credit Calculator
Choose simple (no compounding) or compounding by Daily, Monthly Most common, or Annually.
How It’s Calculated
- Amount Borrowed (Principal):
The exact amount you draw from the line, not the total limit. - Annual Percentage Rate (APR):
This is the yearly cost of borrowing, expressed as a percentage (e.g., 12%). - Borrowing Period (Days/Months/Years):
How long you keep the borrowed money before repayment. - Compounding (if applicable):
Interest may be simple (only on the borrowed amount) or compounded (interest charged on both the original borrowed amount and previously accumulated interest).- Daily compounding: Interest calculated each day.
- Monthly compounding: Interest calculated once per month (most common for business lines of credit).
- Annual compounding: Interest calculated once per year.
💼 Why Use Our Calculator?
Small business financing can be confusing—different lenders quote different rates, terms, and compounding schedules. Our Business Line of Credit Calculator removes the guesswork. In seconds, you can see exactly how much you’ll owe based on the amount you draw, the number of days you hold the balance, and your APR.
- Accurate & Fast: Get precise interest and total payoff numbers instantly.
- Transparent: See how daily vs. monthly compounding changes your total cost before you borrow.
- Built for Entrepreneurs: Designed by small business professionals who understand cash-flow challenges, seasonal cycles, and real-world borrowing.
Empower your decisions—compare different rates or borrowing durations until you find what fits your budget.
💡 What Is a Business Line of Credit?
A Business Line of Credit (LOC) is a flexible financing tool that gives your company access to funds when you need them. Think of it as a revolving credit limit—you can draw money, repay it, and draw again as your cash-flow needs change. Unlike a traditional loan, you only pay interest on the amount you actually use.
Lines of credit are ideal for managing short-term expenses, purchasing inventory, or covering unexpected costs without taking out a full loan. Most businesses use them as a safety net to smooth out seasonal dips or bridge gaps between receivables and payables.
Want to learn more about how LOCs work and what lenders look for? Visit our Education Center.
⭐ Smart Borrowing Starts with Knowledge
The best financial decisions come from understanding your options. Whether you’re exploring your first business credit line or comparing multiple loan offers, knowledge is your strongest advantage. That’s why we built this website—to provide free tools that make financial planning simple, transparent, and data-driven.
- 📊 Calculate — Estimate your true cost of borrowing in seconds.
- 🔍 Compare — Test different APRs, terms, and compounding schedules side-by-side.
- 🧠 Plan — Use our free templates and educational guides to manage credit wisely.
Every informed decision helps your business stay agile, confident, and ready for new opportunities.