Commercial revolving credit lines typically consist of four distinct cost components.
1. Advance Rates
The advance rate is the percentage of the face value of an eligible invoice that InterNex makes immediately available for draw. In professional B2B credit facilities, standard advance rates fall between 70% and 90%. The remaining 10% to 30% is held as a reserve and remitted to you (less fees) once your customer settles the invoice.
2. Facility, Management, and Unused Line Fees
Unlike a static bank loan, a revolving line requires dedicated capital allocation and ongoing monitoring. In addition to a one-time arrangement fee, facilities typically include a fractional unused line fee (generally around 10 basis points, 0.10%) assessed on the average undrawn portion of the facility. This fee covers the cost of reserving committed capital exclusively for your business’s operational use.
3. Interest Rates and Minimum Utilization Structures
Interest is assessed on your deployed capital using a transparent spread over a benchmark rate. To optimize facility efficiency, InterNex structures these lines with a 50% minimum utilization requirement. This means that if your active draws drop below half of the total facility size, interest charges are calculated based on 50% of the facility capacity.
A note on sizing: Because of the minimum utilization threshold, we work closely with you during underwriting to size the facility to your peak working capital cycles to make sure you’re not paying for unneeded capacity.
4. The Advantage of the Automated Interest Sweep
A core benefit of a digitally integrated line of credit is the elimination of “lazy capital.” Through the InterNex Velocity platform, as soon as your customer pays an invoice, the funds are instantly routed via an automated interest sweep to pay down your outstanding principal:
Customer pays the invoice, Velocity routes the payment instantly, and your principal is reduced immediately.
Because interest is calculated on a daily revolving balance, this rapid rotation minimizes the exact duration your capital is deployed, driving down the overall borrowing cost faster than a legacy, paper-driven banking facility or factor lender.
Evaluating the Return on Capital
Access to on-demand working capital frequently unlocks structural cost savings that outweigh the expense of the facility.
| Operational Event | Strategic Value | Financial Benefit |
|---|---|---|
| Vendor Terms | Early payment discounts | Frequently offsets line costs by 1-2% |
| Supply Chain | Bulk purchasing power | Lowers cost of goods sold (COGS) |
| Revenue Capture | Ability to take on larger contracts | Accelerates top-line scale |
Ultimately, a revolving credit facility should be measured not as a static expense, but as an optimization tool that ensures operational integrity and provides the continuous liquidity required to scale.