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GLOSSARYTERMS AS A CREDIT DESK USES THEM

All-in rate (all-in cost)

What is the all-in rate on a business loan, and how is it worked out?

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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

The all-in rate is the total annual cost of a facility expressed as one interest rate: interest at the base rate plus margin on what is drawn, line fees on the limit or commitment fees on the undrawn part, and any upfront fee spread over the term, divided by the balance the business expects to carry. On a US$10m revolving facility with US$8m drawn at 6.0% (US$480,000 a year) and a 0.5% line fee on the whole limit (US$50,000), the all-in rate on the drawn balance is about 6.6%. Some quotes mean only base rate plus margin, so two offers compare only once both count the same fees.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

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