This worksheet from Fieldshore Loans in Crown Point, Indiana estimates credit line interest by hand, with invented figures you replace with your own. Treat the result as your own arithmetic, not an offer; real rates, fees and terms come from funding partners.
What the Business Line of Credit Interest Calculator Needs From You
- The balance you expect to carry, or each draw and paydown in order.
- The number of days each balance stays out.
- An annual rate to test, entered as a percentage.
- Any fees the line charges: draw fees, annual fees or maintenance fees.
A medical office estimating a claims-gap draw can take the balance from the payroll it needs to cover and the days from its usual reimbursement lag.
What the Business Line of Credit Interest Calculator Leaves Out
The arithmetic leaves out what only an offer can supply: the actual rate, how it is set (fixed, or tied to an index), how interest is compounded or billed, minimum payments, fees and any personal guarantee. Some lines bill interest monthly on the average daily balance; others calculate it differently. Read the offer for its method.
Reading Business Line of Credit Interest Calculator Results as a Crown Point, IN Daycare Center
Illustration only, invented figures: a daycare center draws $20,000 for payroll while a subsidy payment is 14 days late. At an annual rate of 12%, the interest for those 14 days is about $92.05 (our arithmetic: $20,000 times 12% divided by 365, times 14). If the payment were 28 days late, the interest would double to about $184.11, because interest scales with the days.
Daycare center financing covers subsidy delays in more detail.
Reading Business Line of Credit Interest Calculator Results as a Crown Point, IN Motel
Illustration only, invented figures: a motel draws $30,000 for payroll and linens in a slow stretch and pays it back in full after 21 days. At an annual rate of 12%, the interest is about $207.12 (our arithmetic: $30,000 times 12% divided by 365, times 21). Paying half back after 10 days would cut that figure, because the balance would be smaller for the remaining days.
Hotel loans covers room refreshes and slower-month payroll.
The Interest Formula: Balance, Rate and Days Outstanding
Simple daily interest on a credit line balance is the balance times the annual rate divided by 365, times the number of days. When the balance changes during the month, work out each period separately and add them, or multiply the average daily balance by the rate and the days.
| Step | What to do |
|---|---|
| 1 | Write each balance and the days it was outstanding |
| 2 | Multiply each balance by its days (balance-days) |
| 3 | Add the balance-days together |
| 4 | Multiply the total by the annual rate and divide by 365 |
A Worked Month on an Invented $40,000 Line
Illustration only, invented figures: a business has a $40,000 line at an annual rate of 12%. It draws $15,000 on day 1, draws another $10,000 on day 11, and pays back $12,000 on day 21.
| Days | Balance | Balance-days (our arithmetic) |
|---|---|---|
| 1 to 10 | $15,000 | 150,000 |
| 11 to 20 | $25,000 | 250,000 |
| 21 to 30 | $13,000 | 130,000 |
| Total | 530,000 |
The interest for the month is about $174.25 (our arithmetic: 530,000 balance-days times 12% divided by 365). The average daily balance is about $17,667 (our arithmetic: 530,000 divided by 30 days).
Fees That Sit Outside the Interest Figure
Fees can matter as much as interest on a line that is drawn briefly. A draw fee charged on each draw, an annual fee for keeping the line open, or a maintenance fee each month all add to the cost. Add them to the interest from this worksheet before comparing two lines.
The business line of credit page explains draws, paydowns and renewals, and the six types compared sets a line against other funding.
Ready to send real figures? The request form starts the request.
By Fieldshore Loans · Updated