What Are the Fees on a Business Line of Credit?

If you are a business owner in need of cash, you might consider opening a business line of credit. A line of credit is revolving, and works like a credit card in that you are free to use it as often as you like for as much as you like, up to your limit. The following are typical fees associated with a business line of credit.

Application Fee

There may be a one-time fee (around $150) for opening your line of credit.

Annual Fees

Your line of credit may incur annual fees (around $150). Depending on your lender, you may be able to get these waived.

Closing Costs

Your business line of credit may have closing costs. However, look for lenders that may waive these fees.

Interest

Many business lines of credit will have variable interest rates throughout the life of the line. You incur interest only when the line of credit is used (versus the entire time the line is open).

Collateral

Some lenders may require you to put up collateral for your line of credit. While collateral is not a fee, it is an important monetary consideration.

References

• Business Line of Credit
• Wells Fargo Business Line of Credit
• Expand My Business