Business line of credit fees fall into a few types: an origination fee to open the line, a draw fee each time you pull cash, an unused line fee on the part of the limit you leave alone, and a maintenance or annual fee for keeping the account open. Which ones you pay depends on the lender and the program, and on a line that mostly sits idle the fees can add up to more than the interest. We define each fee, run the math on a $100,000 line that's lightly used and one that's fully drawn, and lay out SBA's fee rules as of October 2026.
What fees can a business line of credit charge?
A line of credit is a standing promise to lend, and lenders often price the promise separately from the money. The Federal Reserve's Commercial Bank Examination Manual (February 2026 edition) says that for a loan commitment "the bank often requires the customer to pay a fee and/or maintain a stipulated compensating balance." It adds that a committed revolving credit usually has a required fee, while a revocable advised line may not require fees or compensating balances.
| Fee | Charged on | Usual form |
|---|---|---|
| Origination | Opening the line | Percentage of the limit or a flat amount, once |
| Draw | Each advance | Percentage of the draw or a flat amount |
| Unused line (commitment or standby) | The part of the limit you don't use | Annual percentage, billed per your agreement |
| Maintenance or annual | Keeping the line open | Flat monthly or yearly charge |
| Renewal | Extending the term | Flat amount or percentage of the limit |
| Collateral monitoring | Lines backed by receivables and inventory | Percentage of the balance or a per-exam charge |
Late fees and pass-through costs such as UCC filing or appraisal fees can apply too. SBA lenders work from a closed list, covered below. Online lenders set their own schedules, so compare them only on complete written fee lists. Our guide to business line of credit rates by lender type covers pricing differences.
How each business line of credit fee works: draw, unused line and maintenance
Each business line of credit fee works off a different base: a draw fee on money you take, an unused line fee on money you leave in place, and a maintenance fee on the account itself. For the math, assume a $100,000 line at 10%, which is the 7.00% bank prime rate in the Fed's H.15 release for October 5, 2026 plus an assumed 3-point margin. The fee levels are assumptions too, and your offer may differ or skip some fees.
Origination fee. An assumed 1% of the limit costs $1,000 at opening. If it's deducted from your first advance, that draw nets less cash.
Draw fee. An assumed 1% per advance costs $250 on a $25,000 draw. Held for 30 days at 10%, that draw costs about $205 in interest, so the fee more than doubles the cost and the combined $455 annualizes to roughly 22%.
Unused line fee. At an assumed 0.50% a year, a line averaging $30,000 drawn leaves $70,000 unused, for $350 a year. Ask whether the unused amount is measured against the full limit, your average daily balance or what you're allowed to draw. In a worked example from BDC, a company with a $1.7 million authorized line could draw only $1,298,750 that month once receivables and inventory were margined and priority debts deducted, so a fee on the full limit would partly pay for credit it couldn't reach.
Maintenance or annual fee. An assumed $500 a year adds 5 percentage points to the cost of a line averaging $10,000 drawn, and half a point on one averaging $100,000.
What a $100,000 line costs when it's lightly used versus fully drawn
The table applies those assumptions to three ways of using the same line for a year.
| Year one | Lightly used | Half used | Fully drawn |
|---|---|---|---|
| Average balance | $10,000 | $50,000 | $100,000 |
| Total draws | $20,000 | $60,000 | $100,000 |
| Interest at 10% | $1,000 | $5,000 | $10,000 |
| Draw fees at 1% | $200 | $600 | $1,000 |
| Unused line fee at 0.50% | $450 | $250 | $0 |
| Annual fee | $500 | $500 | $500 |
| Origination fee at 1% | $1,000 | $1,000 | $1,000 |
| Total cost | $3,150 | $7,350 | $12,500 |
| Share of average balance | 31.5% | 14.7% | 12.5% |
On the lightly used line, fees make up $2,150 of the $3,150, more than twice the interest, and even in year two, without the origination fee, it still costs 21.5% of its average balance. The fully drawn line's cost is mostly interest, so the margin over prime is what to negotiate there. If you'll carry a small balance, a smaller limit or a line without an unused fee can cost less even at a higher rate (see how big a business line of credit should be). If you'll sit near the limit for long stretches, compare the cost with a term loan.
▦Estimate your lines of credit paymentsRun the numbers in the lines of credit estimator →▸Which fees can an SBA line of credit charge?
SBA business line of credit fees work differently from bank LOC fees because SBA publishes a closed list of what lenders may collect. SBA's 7(a) lender guidance lists revolving lines under SBA Express, Export Express, CAPLines and the Export Working Capital Program, plus the MARC and Working Capital Pilot programs, and SBA Express lines go up to $500,000 with a maximum 50% guaranty.
Under 13 CFR 120.221 and SOP 50 10 8.1, effective October 1, 2026, "any fee not expressly permitted in 13 CFR § 120.221 is prohibited," and the SOP's examples include commitment, origination, renewal and prepayment fees. An unused line fee is in effect a commitment fee, which the SOP prohibits, and a routine maintenance fee isn't a permitted category either. The lender's 0.55% annual service fee can't be passed on to you. Fiscal 2027 guaranty fees come from SBA Information Notice 5000-881797.
| SBA fee | Rule as of October 2026 |
|---|---|
| Upfront guaranty fee (lender may pass it to you) | 0.25% of the guaranteed portion for maturities of 12 months or less. Longer maturities: 2% on loans of $150,000 or less, 3% on $150,001 to $700,000, higher above that. WCP and EWCP lines over 12 months pay 0.525% to 1.35% by maturity |
| FY 2027 relief | 0% on loans of $700,000 or less to manufacturers, listed food supply chain businesses and rural businesses, and $0 on SBA Express loans to veteran-owned businesses |
| Packaging fee | Flat up to $2,500, or a percentage capped at 5% for loans of $150,000 or less and 3% above, $30,000 maximum |
| Extraordinary servicing | Up to 2% a year on the balance needing special servicing, such as receivables and inventory monitoring. Working Capital CAPLines on a borrowing base can exceed 2% |
| MARC annual review | Up to 0.50% of the maximum loan amount on revolving MARC loans |
| Late fee | Up to 5% of the regular payment when more than 10 days late |
On a $250,000 SBA Express line with a maturity over 12 months and the full 50% guaranty, the FY 2027 upfront fee is 3% of the $125,000 guaranteed portion, or $3,750. With a maturity of 12 months or less it would be $312.50, and a qualifying manufacturer would pay nothing. Our SBA guaranty fee guide and SBA loans page have more.
Canada: lines under the CSBFP
The Canada Small Business Financing Program (page modified June 22, 2026) covers lines of credit up to $150,000 for working capital at no more than the lender's prime lending rate plus 5%. A 2% registration fee applies to the total amount authorized, so a $150,000 line carries a $3,000 fee even if you only draw $40,000.
What lenders review before they set or renew a line
A business line of credit with an annual fee or unused line fee is usually tied to a yearly review, and lender underwriting at that review runs on your financial statements. The Fed's manual says lines "are generally reviewed annually by the bank" and describes lenders checking balance sheets, income statements, agings and inventory lists monthly or quarterly, with a borrowing base certificate at least monthly. Working-capital lines may also carry a clean-up period, usually 30 days, when the balance must be paid to zero, though the manual says that's becoming less common. The FDIC's loan examination manual (March 2026) says "adequate comparative financial statements, income statements, cash flow statements" should be available to bank lenders.
SBA spells the review out. Revolving MARC loans need an annual review of year-end and interim results that assumes full use of the line and shows debt service coverage of at least 1.10:1, and a line that fails two reviews in a row must convert to a fully amortizing term loan. Working Capital Pilot lenders must obtain updated financial statements every year and run a full credit analysis at renewal.
Keep year-end and interim financial statements, business tax returns, receivable and payable agings, inventory reports and a debt schedule ready, plus borrowing base certificates on asset-based lines. Our business loan documents checklist has the full list.
Questions to ask before you sign a line of credit agreement
Regulation Z exempts "an extension of credit primarily for a business, commercial or agricultural purpose," so a business line offer may not show an APR. Ask each lender:
- Which fees apply, including renewal, monitoring and early termination?
- How is the unused fee measured, and how often is it billed?
- Is the draw fee a percentage or a flat amount, and is there a minimum draw?
- Does the maintenance fee apply at a zero balance?
- What does renewal require, and is there a clean-up period?
- When can the lender reduce, freeze or end the line, for example under a "material adverse change" clause?
- What's the total yearly cost at your expected average balance?
When you apply through EQ Funding, one application goes to lenders in our network who compete for your business line of credit. Approval and terms vary by lender, so ask each for its full fee schedule and run it through the table above at your expected balance.