Short answer: A business loan’s cost is not one number. It is the interest, the establishment fee, legal and valuation costs, any ongoing or drawdown fees, and what it costs to exit. Four things drive the total: the security, the term, the strength of your exit and how clean the file is.
Every cost that can appear, and what to ask about each
A quoted rate is one line of a loan. These are the others. Not every loan carries all of them, and a lender who cannot tell you which apply to yours before you sign is telling you something.
| Cost | What it is for | What to ask |
|---|---|---|
| Interest | The cost of the money, usually charged monthly on short-term lending | Whether it is charged on the full amount or the drawn balance, and whether it is capitalised into the loan or paid monthly |
| Establishment fee | Setting up and documenting the loan | Whether it is a flat fee or a percentage, and whether it comes out of the advance or is added to it |
| Legal and title costs | Preparing documents and registering the security | Whether the lender’s legal costs are capped, and who pays if the deal does not proceed |
| Valuation | Establishing what the property is worth | Whether a desktop valuation is acceptable, and what a full valuation would add in cost and days |
| Ongoing or line fees | Maintaining a facility that is not fully drawn | Whether you are charged on the limit or the balance |
| Discharge or exit fee | Releasing the security when you repay | The exact figure, in writing, before you sign — not at payout |
| Default or extension costs | What applies if the exit runs late | The rate, the notice period and whether an extension is available at all |
The last two are where borrowers are most often caught, because both sit at the end of the loan when the negotiating position has reversed. Get both in writing at the start.
What actually drives your price
Four things do most of the work, and none of them is your turnover.
- The equity behind your existing loan. The further the total borrowing sits below the property’s value, the less exposed the lender is and the better the pricing. This is the single biggest driver.
- The term and the strength of the exit. A three-month loan repaid by a dated settlement is a different risk from a twelve-month loan repaid by an intention to refinance. A documented exit is worth real money.
- The property type and location. Metropolitan residential, commercial and industrial property in active markets price best. Vacant land, rural holdings and specialised buildings price more conservatively because they take longer to sell.
- How clean the file is. Not your credit score — the title. An old caveat, an unregistered interest, a name that does not match, or an owner who cannot be reached all add work, and work has a cost.
Why don’t we publish a rate?
Because a ‘from’ rate is the wrong number in three different ways, and every one of them lands on the borrower.
It is the best case. A rate advertised as ‘from’ belongs to the strongest file a lender has ever written, which is almost never yours. Quoting it sets an expectation that the written offer then has to walk back, and that conversation helps nobody.
It is not comparable. A rate quoted without the fees, the term, the charging basis and the exit costs beside it cannot be compared with another lender’s rate quoted the same way. Two offers at the same headline rate can differ by thousands once the rest is counted.
And it is an invitation. A published rate card tells every competitor exactly what to undercut, which drives the market towards advertising numbers rather than writing sensible loans.
What you get instead is the real figure for your file, with every cost itemised, in writing, before you commit to anything. If it is not right for you, you have lost an hour rather than a week.
The cost of waiting belongs in the same calculation
Short-term property-secured lending is priced above bank lending. It is short, it sits behind another lender, and it is assessed on equity rather than income. Comparing its rate with a bank term loan and concluding it is expensive is arithmetic that is missing a column.
The column is what the delay costs. Put a number on it before you compare anything: a settlement that falls over and forfeits a deposit, a contract that goes to someone else, a garnishee that escalates into something harder to unwind, a crew stood down for a fortnight, or a purchase price that moves while you wait for an answer.
Sometimes that number is small and the bank is plainly the better answer. When it is, the right advice is to wait, and any lender worth using will say so rather than write the loan.
Sometimes the number is larger than the entire cost of the finance, and the comparison stops being close. The point is not that fast money is cheap. It is that the cost of the loan and the cost of the delay are the two figures that belong next to each other, and most borrowers only ever calculate one of them.
How do you compare two offers properly?
Reduce both to the same three numbers and the comparison becomes simple.
- Total cost in dollars, over the actual periodNot the rate. Add the interest you will pay over the months you will genuinely hold the loan, plus every fee, plus the discharge cost. One figure per offer.
- What lands in your accountThe advance minus anything deducted at settlement. Two offers for the same nominal amount can put materially different sums in your account, and the shortfall is a cost like any other.
- What happens if you are a month lateAsk both lenders, get it in writing, and compare the answers. This is the number nobody calculates and the one most likely to matter.
What a good offer looks like
Whoever you borrow from, a written offer should let you answer five questions without ringing anyone. The amount advanced and the amount that reaches your account. Every fee, named and quantified. The term and the exact repayment dates. What it costs to discharge the security. And what applies if the exit runs late.
If any of those five is missing, absent from the document or answered with ‘we’ll sort that out later’, that is the answer to the question you were really asking. It is a far more reliable test of a lender than any advertised rate, and it takes five minutes.
Frequently asked questions
What is a typical interest rate for this kind of loan?
It depends on the equity, the term, the exit, the property and how clean the title is, which is why we do not publish a figure. What we will commit to is that every cost appears in your written offer, itemised, before you sign anything.
Are the fees taken out of the loan or paid separately?
Usually they can be capitalised into the loan so nothing has to be paid upfront, which is what most borrowers prefer. Your offer will state exactly which costs are deducted at settlement and which are added to the balance.
Does it cost anything to find out what my loan would cost?
No. The eligibility check is free, takes about 60 seconds and makes no credit enquiry. A written offer costs nothing either.
What happens if I repay early?
On short-term lending, early repayment is common and usually welcome. Ask any lender, including us, whether interest is charged for the full term regardless — the answer varies and it should be in your offer.
Why is a second mortgage cheaper than an unsecured loan?
Property security lowers the lender’s exposure, so property-secured lending is generally priced below unsecured and merchant-style finance, particularly at larger amounts.
Does it cost anything to apply?
No. There's no cost to apply or check your eligibility. All costs are set out in writing in your loan offer before you sign anything.
Will checking my eligibility affect my credit score?
No. Our 60-second eligibility check doesn't make a credit enquiry. A credit check is only done later, with your consent, if you decide to proceed.
