How to compare online business loan costs in total dollars

Business loan pricing in New Zealand is individual. Two businesses borrowing the same amount can receive very different offers, because the lender is pricing their particular risk. That is why you will not find advertised rates here. What you can do is compare the offers you actually receive in a way that cannot mislead you: total dollars.

What should you ask every lender for?

Use the same list every time. Ask for each item in dollars, not just a percentage:

Cost item	What it is	Ask
Establishment fee	Charged to set up the loan	Is it deducted from the payout or added to the loan?
Ongoing or account fee	Monthly or annual charge	How much over the full term?
Line or facility fee	For lines of credit, sometimes on unused limits	Is it charged on the limit or the balance?
Drawdown fee	Charged per draw on a line of credit	Per draw, or a percentage?
Legal and valuation fees	Common for property-secured loans	Who pays, and is there an estimate?
Early repayment cost	If you repay ahead of schedule	Is there a saving, a fee or neither?
Late payment fee	If a repayment fails	How much, and how is it applied?
Discharge fee	To release security at the end	Amount?
Total repayable	Everything you will pay over the term	The single most useful number

How do you build a fair comparison?

1. Fix the amount. Compare $80,000 against $80,000, not $80,000 against $95,000.
2. Fix the term. Twelve months against twelve months.
3. Add every fee to the repayments to get total cost.
4. Note the net payout. If fees are deducted, how much actually reaches your account?
5. Check the security and guarantees. A cheaper loan secured on your home is not the same as a slightly dearer unsecured one.
6. Check the schedule. Weekly, fortnightly or monthly — which fits your inflows?

Want help lining up options? Start an enquiry and ask your specialist to show you total dollars for each realistic option.

Worked example: two offers, one decision

Illustrative only. A Wellington café owner needs $40,000 for a coffee machine and kitchen refit, repaid over 12 months.

	Offer A	Offer B
Amount	$40,000	$40,000
Establishment fee	$1,200, deducted	$600, added to loan
Repayment frequency	Weekly	Monthly
Total repayable	$48,300	$47,600
Net received	$38,800	$40,000
Security	Director guarantee	Director guarantee plus general security agreement

Offer B is cheaper in total and pays out the full amount. But the café’s takings come in daily, and weekly repayments in Offer A match that rhythm. The owner chooses B and sets aside the monthly amount weekly in a separate account. Both choices could be sensible; the comparison made the trade-off visible.

How does repayment frequency change things?

More frequent repayments reduce the balance faster, which can lower total cost for loans priced on the outstanding balance. They also mean money leaves your account more often. For a business with steady daily or weekly takings, that can be easier. For a contractor paid monthly, weekly repayments can create pressure in the weeks before payday. Cost and cash-flow fit both matter.

What about lines of credit?

Lines of credit are harder to compare, because cost depends on how you use them. Write down a realistic pattern: “Draw $25,000 in May and $25,000 in August, each repaid over 12 weeks.” Ask each provider for the dollar cost of that exact pattern, including line and drawdown fees. Read more on the online line of credit page.

What should make you walk away?

• A lender who will not give you a total repayable figure in writing.
• Fees requested before approval or settlement — a classic scam pattern.
• Pressure to sign today or lose the offer.
• Documents that differ from what you were told.

Before signing, use the checklist on our e-signing page.

Does GST apply to loan fees?

Financial services are generally exempt from GST in New Zealand, but some associated costs, such as legal or valuation services, may include GST. Ask for a breakdown and check with your accountant how to treat each cost in your books.

Is the cheapest offer always best?

No. The best offer is the one that costs a fair amount, fits your cash flow, uses security you are comfortable with and comes from a lender you trust. Sometimes that is the cheapest; often it is close. What matters is that you choose with all the numbers in front of you.

How do you account for the time value of a faster loan?

Sometimes the cheaper offer is slower, and the delay itself costs money: a missed supplier discount, a contract you cannot start, an Inland Revenue balance that keeps growing. Put a rough dollar figure on what waiting would cost and add it to the slower offer when you compare. You may find the slightly dearer, faster option is the cheaper one overall. Equally, if nothing is lost by waiting a week, there is no reason to pay extra for speed.

Get offers you can actually compare

Start with our 60-second enquiry. No credit check is run, your details are kept with one team instead of being dispersed across many lenders, and a real person reads them. Be precise about the amount and how long you want to repay, so any offers you see can be compared fairly. Check your options.