The short version
Compare total dollars repaid, not headline numbers.
How-to guide
How to compare business loan offers when there's no comparison rate
A practical way to compare business loan offers in Australia: total cost in dollars, cash received, fees, early repayment and questions to ask.
How-to guide
The short answer
Two lenders offer you $100,000 for a new machine. One has lower repayments. The other has fewer fees. A third is pitched by the supplier and sounds easy. Which is cheapest? Without a comparison rate to lean on, most owners guess, and the guess is often wrong. Here's a method that works for any business loan, from a small unsecured loan to a property-backed facility.
To compare business loan offers, put every offer on the same footing: the cash you actually receive, the total you'll repay including every fee, the term you'll realistically keep the loan, and what happens if you repay early. Business loans don't have to show a comparison rate, so the clearest single number is total cost in dollars over your real term. Then weigh repayment frequency, flexibility and security against that number.
At a glance
The essentials
The points that decide whether this suits your business.
What matters
Check how much cash you'll actually receive after fees.
Watch out for
Work out the cost for the term you'll really keep the loan.
Key points
- Compare total dollars repaid, not headline numbers.
- Check how much cash you'll actually receive after fees.
- Work out the cost for the term you'll really keep the loan.
- Security, repayment rhythm and flexibility matter too.
Why is comparing business loans so hard?
Three reasons:
The Reserve Bank's October 2025 review of small business finance found about one in five small businesses report difficulty getting finance, with finding a suitable price among the reasons. A clear comparison method makes that part easier.
- No comparison rate. Business credit falls mainly outside the National Credit Code, so lenders aren't required to show one.
- Different fee structures. Some load costs upfront, some spread them through the term, some hide them at the exit.
- Different shapes. Weekly versus monthly repayments, balloons, prepaid interest and redraw all change the picture.
Step 1: Get every offer in writing
Ask each lender for:
If an offer can't be put in writing, it can't be compared.
- The loan amount and the cash you'll actually receive after any deductions.
- The repayment amount and frequency and the number of repayments.
- Every fee: establishment, application, ongoing or line fees, legal, registration, valuation or assessment.
- Any balloon, residual or prepaid interest.
- Early repayment terms and charges.
- Default fees and charges.
- The security and guarantees required.
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Step 2: Work out the total cost in dollars
For each offer:
Total cost = (repayment × number of repayments) + balloon + all fees not already included − cash you actually receive
That one number captures interest and fees together. It's the closest thing business borrowers have to a comparison rate, and it's easier to understand.
Step 3: Adjust for the term you'll really keep it
Many business loans are repaid early: a contract pays out, a property sells, the business refinances. If you expect to repay early, recalculate:
A loan that looks cheapest over five years can be dearest over eighteen months because of a hefty exit fee, and the reverse is common too.
- Total repayments made up to that point.
- Plus the payout amount at that point.
- Plus any early repayment or exit fee.
- Minus the cash you received.
Step 4: Check the shape fits your cash flow
Cost isn't everything. A slightly dearer loan with the right shape can be the better choice.
Repayment frequency: Questions to ask Does it match how money comes in?
Term: Questions to ask Does it end before the purchase stops earning?
Balloon: Questions to ask Will the asset be worth more than the balloon when it's due?
Flexibility: Questions to ask Can you make extra repayments or redraw?
Security: Questions to ask Is your home or the asset on the line, and is that proportionate?
Guarantees: Questions to ask Who's personally liable?
Step 5: Weigh it against what the purchase earns
The cost of finance only means something next to the benefit of the purchase. Put the price, the total finance cost and the expected monthly benefit into our purchase payback calculator. If the purchase pays back comfortably either way, choose the offer with the best shape. If it's tight, total cost becomes the deciding factor.
A worked example
Illustrative figures only. A Hobart joinery business needs $100,000 for a CNC router and compares three offers:
Cash received: Offer A $97,500 (fee deducted); Offer B $100,000; Offer C $100,000
Repayments: Offer A 60 monthly; Offer B 36 monthly; Offer C 156 weekly
Total of repayments: Offer A $131,000; Offer B $121,500; Offer C $124,800
Other fees: Offer A $0; Offer B $1,200; Offer C $600
Balloon: Offer A $0; Offer B $0; Offer C $0
Total cost over full term: Offer A $33,500; Offer B $22,700; Offer C $25,400
Exit fee if repaid at 18 months: Offer A Large; Offer B None; Offer C Moderate
Offer A has the lowest repayments but costs the most. Offer B costs least and has no exit fee, which matters because the business expects a large contract payment within 18 months. Offer C's weekly repayments look smaller but don't match the joinery's monthly client payments. The business chooses B, after checking the bigger monthly repayment fits its slowest month.
What questions should you ask every lender?
The Australian Financial Complaints Authority handles complaints from small businesses with fewer than 100 employees for free, though credit facilities over $5 million fall outside its limits.
- What's the total I'll repay, including every fee?
- How much will actually land in my account?
- What happens if I repay early, and what will it cost?
- What happens if I miss a payment?
- What security and guarantees do you need?
- Which external dispute resolution scheme do you belong to?
What mistakes should you avoid?
Our guide to business loan costs lists the fees to ask about, and what lenders check before funding a purchase helps you prepare.
- Comparing repayments instead of totals. Longer terms always look cheaper per repayment.
- Forgetting deducted fees. Borrowing $100,000 and receiving $96,000 changes the maths.
- Ignoring exit fees when you're likely to repay early.
- Applying everywhere at once. Multiple formal applications can add enquiries to your credit file.
- Letting a supplier's convenience decide. Supplier finance can be fine, but compare it like any other.
How should you weigh security and guarantees?
Two offers with similar costs can carry very different risk. An unsecured loan with a director's guarantee and a loan secured over your home are not equivalent, even at the same price. Ask yourself what's on the line if things go wrong, and whether that's proportionate to the purchase. For a modest amount, keeping the family home out of it may be worth a slightly higher cost.
Keep a simple comparison sheet
Before you speak to lenders, set up a one-page sheet with a column for each offer and rows for: cash received, repayment amount and frequency, number of repayments, every fee, balloon, total repaid, total cost, exit fee, security and guarantees. Fill it in as each offer arrives. It takes ten minutes, stops you comparing apples with oranges, and gives you a clear record to discuss with your accountant before you sign anything.
Want offers you can actually compare?
We'll put the numbers in front of you plainly, in dollars. Asking us leaves your credit file untouched; a check only comes up once you choose to proceed. We don't push your enquiry to a pile of lenders. A real person looks at what you're buying and the business behind it, and calls you to walk through options and their full cost.
Please answer the form accurately, especially the amount, the purchase and your turnover, so the first options we show are ones you can rely on. Get options you can compare.
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Common questions
How to compare business loan offers when there's no comparison rate FAQs
Why don't business loans have a comparison rate?
Comparison rates are required for consumer credit under the National Credit Code. Credit used mainly for business purposes falls outside that code, so lenders aren't required to show one. That's why comparing total dollars is so important.
What's the single best number to compare?
Total cost in dollars over the term you'll keep the loan: every repayment plus every fee, minus the cash you actually receive. It captures interest, fees and the effect of deductions at settlement.
How many offers should I compare?
Two or three well-matched offers is usually enough. Applying formally with many lenders can add credit enquiries to your file. Asking Loanster doesn't involve a credit check.
Does a weekly repayment cost more?
Not necessarily in total, but weekly debits can strain a business that's paid monthly. Match repayment frequency to how money comes into your account.
Are broker fees normal?
Some lenders and brokers charge fees, some don't. Whatever applies should be disclosed in writing before you commit, and included in your total cost comparison.
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Last reviewed: 28 October 2026
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