Determine the total cost of your business line of credit.
Business Line of Credit Calculator
Getting preapproved has never been easier.
See if you qualify for your business line of credit.
We value the overall health of your business, not just your credit score.
This helps us work out the most benefitial options for you, regardless of your business history.
Time in Business
We evaluate how long you’ve been in business and repayment history.
We look at your annual revenue and review your daily balances.
Don’t worry, your credit score or defaults won’t be the deciding factor
What is the business line of credit calculator?
The easiest approach to learn about company funding programs is to do some research, and one of the best ways to accomplish that is to use a net terms calculator. If you’re considering a business line of credit, a business line of credit calculator will help you see and better understand how payments with interest might work.
A business line of credit is a revolving line of credit that allows you to spend as much as you like as long as you keep within your credit limit. Many business owners prefer this to a business loan since you only pay interest on what you use and you have access to additional cash flow at all times. Read our business line of credit page for a more detailed explanation of what a business line of credit is and how it might benefit your company.
When utilizing the business line of credit calculator, you’ll need to input various pieces of information. The ultimate goal is to determine how much debt you can take on without being overleveraged while yet having access to sufficient resources to meet your demands.
Here’s what you will need:
Because you’ll be paying interest on borrowed funds, you’ll need to know what you’re spending it on and what you’ll get in return.
The loan amount, interest rate, and period will be requested by the business line of credit calculator. Because you only pay interest on what you use, the loan amount is how much you spent, not the maximum credit limit. The net terms calculator will then ask for the interest rate and the length of the loan. The loan term refers to the total amount you’ll pay, including compound interest, throughout the time you’ll be repaying the money you borrowed. You’re paying interest on interest when you pay compound interest.
Important Note: The business line of credit calculator calculates monthly payments after borrowing a significant amount, although the program is for revolving credit lines. This means you’ll be able to pay off the loan faster, freeing up more credit for new purchases. The business line of credit calculator is intended to be a reference, but your payments may differ if you make additional payments or purchases. If you use a company line of credit with weekly or even daily repayment terms instead of monthly, your payments will vary.
Why not choose a business credit card?
You’ll already be aware of how a business line of credit works if you have a company credit card. However, there are certain distinctions, such as maximum credit limits, rates, and durations. In comparison to business credit cards, which have lower credit limits, higher rates, and indeterminate lengths, a business line of credit will usually have bigger sums, lower interest, and a set term.
The more money you have, the more initiatives and purchases you can do. It can be used for a variety of purposes, including:
- Purchasing new machines or equipment
- Putting together an office
- Increasing the efficiency of a transportation fleet
- Product lines are being expanded.
- Obtaining larger contracts
- Renovating or expanding
Input the amount of money you’d like to withdraw, an interest rate %, and how long you anticipate it’ll take you to pay down the pulled amount into the business line of credit calculator. The result should show you how much you’ll have to pay each month to pay off the loan at the end of the term. Play about with the numbers to come up with a monthly payment that you’d be happy to make.
When comparing business lines of credit, you should always be aware of the fees. Fees might creep into your repayment timeline in a variety of ways.
All fees related with obtaining a business line of credit, closing it, and taking it out. Underwriting fees are frequently charged for assessing your business and creating the contract.
Accounts that are inactive may be charged a maintenance fee. Keep your account active and use the line of credit to make purchases and payments to avoid this cost.
This cost, also known as a draw fee, is charged when you overdraw your account or spend more than your credit limit permits. Pay down what you’ve already spent before making additional purchases to avoid this additional cost.
What affects your rates:
A business line of credit’s rates are influenced by your credit score, which is based on your credit card payments, loan payments, and other money borrowing criteria. Like any financial product, the better the health of your business, the better the rates, and the riskier your firm is to lend to, the higher the rates. There’s no need to be concerned; there are numerous negative credit business loan options available.
The more money you make, the easier it will be to repay your debt. Companies with high revenue will have better rates because they are a lower risk for lenders. If your revenue isn’t very strong, you can either go for collateralized funding, which requires you to put assets up as collateral, or invoice-based financing, which allows you to just borrow the money that has already been committed to come in.
It all boils down to the amount of danger you’re willing to take. Interest is given to compensate the lender for the risk he or she is taking by lending money to another company or person. If you need a huge quantity of money or credit, the lender has more to lose if you default. Smaller quantities will have reduced rates, but you may discover that your project options are limited.
Business line of credit examples
Visualizing what your repayment will look like can be really helpful. Using a net terms calculator, you can get the proper amount of capital at the right rates for your firm by writing down your financial strategy.
Example #1 – Monthly repayment:
Let’s imagine your company needs $50,000 in credit and is approved by a lender at a 14% interest rate. Your payment terms are monthly, and you plan to pay off your $30,000 purchase in eight months.
The entire repayment is $31,596.31, with the 14 percent interest amounting to $1,596.31. The monthly payment would be $3,949.54 for an eight-month period, or $929.30 each week.
Example #2 – Weekly repayment:
Let’s imagine your company has a $20,000 business line of credit and wishes to pay off a $17,000 purchase in weekly installments. You have bad credit and a 19 percent interest rate, and you need your cash flow free of debt repayments in four months.
The entire repayment amount is $20,230.00, including interest of $3,230.00. Weekly payments for four months come to $389.04 per week, or $1,566.66 per month if you choose monthly payments.
When using the net terms calculator to examine these two scenarios, you can see that the rate influences how much more you pay to borrow the money, whereas the quantity and term length influence the payments you make. You can afford a higher loan if your cash flow can sustain roughly $4,000 in monthly repayment. Withdrawing less would influence you more than the rate if you needed lower payments, as long as the term did not exceed two years.
If you’re still confused about what your company can handle after using the business line of credit calculator, talk to a cash flow management software or an accountant. If you need financial assistance, the New York Tribeca Group is always willing to help.
How to qualify for a business line of credit
Accessing funding for your business is now easier than ever. With online technology, funders can now easily underwrite a business with minimal paperwork and documentation required.
Here’s what you’ll need to qualify:
- 3+ months in business
- $110K+ annual revenue
- 550+ credit score
Got some questions?
A business line of credit calculator is a device that will help you prepare for what to expect with your loan.
It allows you to get an approximate number for everything that your loan will entail. Fees, length of loan and how much you need.
It’s pretty simple. Just be sure to have your loan amount, the ideal time frame and how frequently you’d like to make payments.
Once you plug these numbers in, it’ll generate a breakdown of what the loan will cost you overall.
Fees and rates are always a factor in any financing. It’s meant to cover all ties and ends.
You’ll be notified of all fees upfront when given your financing options. We don’t want you to have to worry about hidden fees that you weren’t prepared for.
Financing options don’t cost anything up front. There will be interest rates and fees down the line but they will be included in repayments.
We recommend that you calculate how much the business line of credit will cost you by using our calculator.
Having a healthy overall business is key to qualifying for business rates. The better shape your business is in, the better chances you have of getting a better offer.
It’s not all about a good credit score but making sure that everything else in your business lines up well.
The calculator has an extremely high accuracy rate. If it doesn’t give you the results you predicted, it should be very close.
Loan amounts and fees are subject to change when in the process of negotiating a deal for your business line of credit.