Revolving Credit Facility Calculator
The Revolving Credit Facility Calculator helps businesses estimate borrowing costs and available credit quickly. It is useful for finance teams planning cash flow or comparing facility offers. This calculator translates complex fee structures into clear cost figures. For more on revolving credit, see revolving credit loans and general credit facility terms.
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How To Use The Revolving Credit Facility Calculator
Collect facility data
Gather information such as the committed limit, annual interest rate, commitment fee rate, start date, and expected drawdown schedule from your term sheet or lender correspondence. Understanding your credit facility details helps ensure accuracy.
Enter figures accurately
Input the committed limit, expected draw amount, number of days this amount will be outstanding, and any upfront arrangement fee. This lets the calculator model drawn and undrawn costs precisely. Learn more about fees in fixed costs.
Review the results
Check the total annual cost, effective interest rate, utilisation ratio, and remaining headroom. Export or screenshot the summary before discussing terms further. Understanding these figures aids in negotiations and budgeting.
Benefits of Using the Revolving Credit Facility Calculator
A Revolving Credit Facility Calculator is a valuable tool that helps borrowers determine the amount of credit they can access and manage. It allows users to input financial parameters and receive instant estimates on their borrowing capacity, enabling them to make informed decisions about their credit needs. This can lead to improved cash flow management and the ability to deal with unexpected expenses or investments.
This calculator combines interest and commitment fees into a single comparable figure, simplifying complex fee structures. It supports cash flow planning and improves your ability to benchmark offers. See more about financing options to understand different facility types and associated costs.
How Revolving Credit Facility Costs are Calculated
Credit Line Utilisation
Shows how much of the committed limit is actually used.
Interest Cost Calculation
Calculates interest on the drawn balance for the days in use.
Commitment Fee Calculation
Charges paid on undrawn funds to keep the facility available.
Understanding Your Revolving Credit Facility Calculator Results
Focus on total cost
Look beyond the headline interest rate and consider combined interest plus commitment fees to grasp the true annual expense. This provides clarity when comparing lender offers.
Test different utilisation
Vary draw amounts to simulate high and low utilisation scenarios. Costs rise with increased usage while commitment fees fall, helping spot the break-even point for maintaining the facility.
Account for extras
Remember the calculator excludes legal, monitoring, or early repayment fees unless manually added. Include these when building a comprehensive funding budget to avoid surprises.
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