Work out working capital loan interest instantly with clear inputs, formula shown and shareable results.
A working capital facility charges interest only on drawings but often a commitment fee on the unused portion. Low utilisation therefore raises the effective rate on the money actually used, which is why limits should be sized to real need.
Facility cost
Cost = drawn × rate + (limit - drawn) × commitment fee
Figures are estimates. Lenders apply their own rounding, fees and eligibility rules, and rates change. This is not financial advice — confirm the numbers with your lender.
Because they must hold capital and liquidity against the committed limit whether you draw it or not.
Usually as the average daily outstanding over the period, not the peak drawing.