This Clayhill Advances calculator estimates what a credit line draw costs when repaid over a chosen number of months, and the page explains the interest-only payment on the same balance. Results reflect only the numbers entered; real rates and terms come from funding partners.
How an Interest-Only Line of Credit Payment Is Figured
On many business lines of credit, the minimum payment during the draw period is interest only: the drawn balance times the annual rate, divided by twelve. Nothing goes to principal, so the balance stays where it is until the business pays it down.
Illustration only, with invented figures: a $30,000 balance at an annual rate of 13.5% has an interest-only payment of about $338 a month. Paying it off over 6 months instead would cost about $5,199 a month and $1,192 in total interest; over 12 months, about $2,687 a month and $2,239 in interest.
The calculator on this page gives the payoff figures. For the interest-only figure, use the formula above.
Inputs the Interest-Only Business Line of Credit Calculator Uses for Restaurant Owners
For a restaurant, the balance is usually a food or equipment-repair draw, the rate comes from the line offer, and the months are how long the owner expects the following weeks' sales to take to repay it. Short periods cost less interest and raise the payment.
Inputs the Calculator Uses for Physician Practices With Claims Outstanding
For a practice, the balance is the payroll drawn while claims are outstanding, and the months are the typical claim cycle. If claims usually pay within two months, a two-month payoff shows the cost of carrying that payroll.
Limits of the Interest-Only Business Line of Credit Calculator
Behind the result sit two assumptions: one fixed rate and level monthly payments. It ignores draw fees, annual fees, minimum interest charges, variable rates and how a particular partner calculates interest, daily or monthly. Treat the result as arithmetic, not a quote.
When to Call Clayhill Instead of Using the Calculator
Call (715) 226-9612 when you hold an offer with fees or a variable rate, when the line would carry several purposes at once, or when you are choosing between a line and a fixed loan. Business lines of credit explains limits and renewals, and the request form starts a request.
Interest-Only Periods, Draw Periods and What Comes After
Many lines have a draw period, often a year or more, when the business can draw and repay freely and the minimum payment may be interest only. When the draw period ends, the line may renew after a review, or the balance may convert to a repayment period with principal and interest payments, like a term loan. Read which applies to an offer.
The payoff results from the calculator are a useful stand-in for that repayment period: enter the balance you expect to carry at the end of the draw period, the rate and the months of repayment the offer states. If the offer uses a variable rate, run the calculator again with a higher rate to see how much the payment could move. Comparing the interest-only payment with the payoff payment shows how much principal the business would need to set aside each month to clear the balance on its own schedule.
An Invented Draw Schedule for a Portage County, WI Tavern
Invented figures for a Portage County, WI tavern with a line at an annual rate of 12%:
| Month | Draw or repayment | Balance | Interest-only cost that month |
|---|---|---|---|
| March | Draw $8,000 for a holiday keg order | $8,000 | $80 |
| April | Repay $6,000 from card settlements | $2,000 | $20 |
| May | Draw $5,000 for patio furniture deposits | $7,000 | $70 |
| June | Repay $7,000 | $0 | $0 |
Summed across the four months, the interest-only cost in this invented schedule comes to $170 (our sum).
By Clayhill Advances · Updated
