2026 Business Line of Credit Calculator
See your available credit and monthly interest cost on a revolving line of credit. Decide when a LOC beats a term loan.
This calculator provides estimates for educational use only. It is not tax, legal, or financial advice. Figures are based on current IRS rules — verify against IRS.gov or consult a licensed professional. See our full disclaimer.
Line of Credit Details
Line of Credit Summary
* Estimate only. Actual rates, fees, and terms come from your lender. Not a credit offer.
When a Line of Credit Makes Sense
Smooth the gaps
A LOC is ideal for seasonal slowdowns, slow-paying clients, or a surprise expense — borrow only what you need and repay as cash comes in.
Term loan for big buys
For a known one-time purchase like equipment or real estate, a term loan or SBA 7(a) loan often has a lower all-in cost.
Watch the rate
Variable rates can rise. Model the payment at a higher rate too, so a rate hike does not break your budget.
Plan repayment
Interest-only payments keep the balance flat. Build a repayment plan so the LOC does not become permanent debt.
Check you can afford it
Before drawing on a LOC, confirm the payment fits with the loan affordability calculator at RateFig.
Line of Credit FAQs
A line of credit gives you flexible access to a set amount of funds. You borrow what you need, pay interest only on the drawn balance, and can reuse the credit as you repay it — useful for smoothing cash-flow gaps.
You pay interest on the amount you have advanced each month, but the principal balance stays the same unless you choose to pay it down. That keeps payments low but means the balance does not shrink on its own.
A term loan (such as an SBA 7(a)) gives a lump sum repaid in fixed monthly payments — better for a known, one-time purchase. A line of credit is revolving and better for ongoing or unpredictable short-term needs. Compare with our SBA Loan Calculator.
Business LOC and HELOC rates are usually variable, tied to the prime rate plus a spread set by the lender. The 9.5% here is a typical 2026 estimate — your rate depends on your credit and collateral.