Glossary

Line fee

What a line fee is, how it's calculated on an undrawn facility, and why it matters on a revolving line of credit.

A line fee is charged on the full approved facility limit of a revolving facility, regardless of how much is actually drawn, compensating the lender for keeping funds available on demand rather than only for funds in active use. It sits alongside, and separately from, interest charged on amounts actually drawn, which is why a business line of credit or invoice finance facility used lightly can still carry a meaningful ongoing cost even in a period of low drawdown. Borrowers weighing a revolving facility against a term loan should model the line fee into the total cost of holding the facility available, not just the interest cost of funds actually used. Some lenders charge the line fee only on the undrawn portion of the limit, rather than the whole limit, so the calculation basis is worth confirming before comparing facilities.

Related

Business lines of credit · Facility limit · Establishment fee

Confidential enquiry

Indicative terms in three minutes

Business-purpose and investment finance only. No credit check at this stage.

Confirm what the finance is for

Explore

Related finance.

By borrower type

Explore

Not quite the right product? Every loan type we arrange.

Most scenarios can be structured more than one way. Browse the alternatives, or tell us the situation and we'll recommend the structure.

Business cash flow

Property-backed

Development

Situational

Rural & international

All loan types →