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Pricing a Revolving Line of Credit

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Revolving lines of credit are intended to be repeatedly drawn and repaid over a term. The borrower can owe up to a ceiling at any given time, and as they pay that back, they can borrow back up to the ceiling. Unlike Scheduled Draws and Repays, there is no set schedule for the borrower to draw or repay funds. PrecisionLender allows you to choose "LOC" to set Line of Credit as your payment type.

 

 Select

When Line of Credit is selected as the Payment Type, additional fields unique to Line of Credit may be entered. These are:

  • Expected Balance
    • Initial Balance
      • The amount that the borrower is drawing at the beginning of the term
    • Average Utilization
      • The percentage of the commitment the lender expects the borrower to use
      • If the Initial Balance is "unpinned" (the pushpin icon is horizontal), changing the Average Utilization field will also change the Initial Balance amount.
      • Clicking the pushpin icon will "pin" (the pushpin icon will be vertical) the Initial Balance. Changing the Average Utilization will have no effect on the Initial Balance.

Clicking the chevron next to  

 

  • Fees on Unused LOC
    • A percentage of the unused amount of commitment that will be added to the fees can be configured as a default for this payment type in the Administration Section.
    • This fee can be expressed either as a percentage or as a flat dollar amount and is charged annually.

The Fees section also shows fees for unused portions of lines of credit.

For additional information on the pricing calculations involved with Lines of Credit, visit the following:

 

 

 

 

 

 

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