Quickly estimate the real cost of a business line of credit in Canada. Choose a preset, set your limit, utilization, APR and fees, then see monthly interest, total payments and a clear projection of how fast your balance can drop with planned principal repayments.
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Business Line of Credit Calculator
Business Line of Credit Calculator (Canada)
Estimate interest-only payments, total cost and cash-flow impact for a business line of credit. Choose a preset to pre-fill realistic assumptions, then adjust limit, utilization, rate, draw fees and annual fees to see results instantly.
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Free Business Line of Credit Calculator
Presets
Tap a preset to fill typical limit, utilization, APR, and days outstanding for your industry. You can edit any field below.
Your line of credit details
Your approved LOC maximum. You only pay interest on the portion you draw.
What share of the limit you typically have outstanding. Example: 50% of $100,000 = $50,000 drawn.
Often variable (e.g., prime + spread). Enter your estimated annual percentage rate.
Use fewer than 30 if you only draw part of the month (e.g., float receivables for 20 days).
Some lenders charge a small fee each time you advance funds.
Annual maintenance fee for keeping the LOC open (if applicable).
0% = interest-only. Higher % repays balance faster and cuts total interest.
How far ahead to visualize payments and balance.
If interest is deductible, enter your approximate tax rate to see after-tax cost.
Business Line of Credit Results
Estimated costs & cash-flow
Amount drawn
$0
Interest-only payment / month
$0
Total monthly payment (incl. planned principal)
$0
12-month total cost (fees + interest)
$0
Legend — ■ Interest • ■ Planned principal • — Fees (month 1)
Projection Details
Assumptions
Notes
- Interest ≈ average daily balance × APR ÷ 365 × days outstanding.
- Planned principal reduces balance each month; set to 0% for interest-only.
- After-tax cost = interest × (1 − tax rate) if a rate is provided.
Monthly Projection Table
Show projection table
| Month | Beg. Balance | Interest | Planned Principal | Fees | Total Payment | End Balance |
|---|
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Business Line of Credit Basics in Canada
What is a business line of credit
A business line of credit (LOC) is revolving financing that lets you draw funds up to a set limit, repay, and reuse—paying interest only on the amount you use. It’s ideal for managing seasonal cash flow, covering short-term working capital needs, buying inventory, or bridging receivables.
LOC vs term loan
- LOC: revolving, flexible draws, interest on used balance, variable rate common
- Term loan: lump-sum upfront, fixed schedule, often fixed rate
Costs to watch
- APR or prime + spread
- Annual fee or maintenance fee
- Draw/advance fee and wire/ACH fees
- Inactivity or unused line fee (rare, but possible)
How lenders size your limit
Limits are usually tied to revenues, margins, and collateral (e.g., receivables or inventory). Newer businesses may start smaller and increase over time with consistent usage and on-time payments.
Ways to lower cost
- Repay principal quickly to reduce average daily balance
- Negotiate annual fee credits or waive draw fees with volume
- Compare banks, credit unions and online lenders
This calculator is for education only; actual offers depend on your financials, credit, industry and lender policies.
How to Use the Line of Credit Calculator
- Pick a preset (Retail Store, Restaurant, Salon/Spa, Transportation, etc.).
- Enter your limit and utilization—how much you usually draw.
- Set APR and the average days outstanding the funds remain drawn each month.
- Add draw fee and annual fee if applicable.
- Choose a planned principal repayment percent to model paydown speed.
- Review the monthly chart, KPIs and expand the projection table for full detail.
FAQs: Business Lines of Credit
How is interest on a line of credit calculated
Most lenders charge interest on the average daily balance. We approximate this by multiplying your drawn amount by APR ÷ 365 × days outstanding each month.
Is a line of credit interest-only
Payment requirements vary. Many LOCs require an interest-only minimum; paying extra principal reduces interest and restores available credit.
What’s a typical APR for business LOCs
LOC rates are often variable (e.g., prime + a spread) and depend on credit, collateral, and lender. Use this tool to compare scenarios.
Do LOCs have fees
They can include annual fees, draw fees, and sometimes inactivity fees. Enter these in the calculator to see the true cost.
When is a term loan better than a LOC
For one-time purchases or long-term assets, a term loan with a fixed schedule may be more suitable than revolving credit.
Can a startup get a line of credit
Yes, but limits may be smaller and personal guarantees are common. Building revenue history and collateral helps increase limits over time.
