The rate is not the cost.

A short-term facility is quoted as a rate and paid as a total. An establishment fee paid once does not amortise if you exit early, a minimum term is interest you pay whether you use it or not, and the discharge is itemised. This turns any quote into one effective annualised number you can put next to another quote.

Assumptions, stated rather than hidden. Interest is charged on the full facility limit, which is the common private-lending structure — if your lender charges on the drawn balance only, the true cost is lower than shown. Interest actually borne is calculated over the greater of your expected hold and the minimum term, because minimum-term interest is payable whether or not you use the facility for that long. Where unused interest is refundable, the refund is the difference between what was prepaid and what was borne. The effective annualised cost divides total cost by the net funds you actually received, then annualises over your expected hold — which is why a short hold makes a fixed establishment fee expensive. Line fees, default interest, valuation and QS costs, and any capitalised interest beyond the reserve are not modelled. Nothing here binds any lender. General information only, not financial product advice or credit assistance, and not an offer of finance.