An unused line fee is a fee charged by a lender to a borrower on a line of credit for the portion of the credit line that remains unused. For example, if a business has a revolving line of credit with a $100,000 limit but only borrows $50,000, the lender may charge a fee on the remaining $50,000 that was not drawn upon. The unused line fee is typically calculated as a percentage of the unused portion of the credit line and is intended to compensate the lender for keeping the credit available to the borrower. (Legal glossary, Cobrief)
The unused line fee compensates the lender for committing funds even when they are not being actively utilized by the borrower. (Lucosky Brookman LLP)
An unused line of credit fee (the “Unused Line Fee), which Unused Line Fee shall accrue at a rate equal to three-quarters of one percent (0.75%) per annum times the average daily unused portion of the Line of Credit. (sec.gov)
