Quick answer
To compare business loan quotes fairly, collect the same six numbers from each: amount you'll actually receive, fixed fees, time-based cost to your likely exit month, early repayment charges at that month, repayment rhythm and extension cost. Put them in one table, calculate total dollars at your likely exit and at full term, then check cash-flow fit. The cheapest headline is often not the cheapest loan.
Key points
- Compare net funds received, not just the approved amount.
- Calculate total dollars at your likely exit month and at full term.
- Include the cost of an extension — it prices your plan B.
- Check that repayments fit your cash flow, not just that the total is lowest.
Why are business loan quotes so hard to compare?
Because no two are built the same. One lender quotes a monthly figure, another a total repayable, a third a headline percentage with fees listed separately. Terms differ, fees are named differently, and early payout rules are often buried in the contract.
The fix is to ignore the format each lender uses and extract the same set of numbers from every quote. business.gov.au recommends comparing lenders rather than simply accepting the first offer; this is how to do it properly for short-term finance.
What six numbers should you collect?
| # | Number | Where to find it |
|---|---|---|
| 1 | Net funds received | Approved amount minus fees deducted at settlement |
| 2 | Fixed fees (total $) | Establishment, legal, valuation, documentation, brokerage |
| 3 | Time-based cost to likely exit month | Interest or time-based charges for the months you’ll hold it |
| 4 | Early repayment charge at that month | Minimum interest, prepaid cost or exit fee |
| 5 | Repayment rhythm and amount | Daily, weekly, monthly or lump sum |
| 6 | Extension cost | Fee and pricing if you need more time |
Also note the security required (property, general security, director’s guarantee) and any conditions such as needing to keep a certain balance.
How do you turn those numbers into a comparison?
Calculate two totals for each quote:
- Total at likely exit = 2 + 3 + 4 (+ discharge costs)
- Total at full term = 2 + full-term time-based cost (+ discharge costs)
Then divide each by the net funds received (number 1) if the amounts differ, so you’re comparing cost per dollar you can actually use.
The first total tells you which is cheaper if things go to plan. The second tells you which is cheaper if they run long. If the same quote wins both, it’s an easy choice. If they split, the decision comes down to how confident you are in the exit date — and that’s where the short vs long term comparator helps, because it plots both quotes month by month and shows where they cross.
Want quotes laid out this way from the start? Send a 60-second enquiry — enquiring won’t touch your credit file.
What traps skew a comparison?
Comparing approved amounts instead of net funds. A loan that deducts large fees at settlement leaves you with less working money.
Using full-term cost when you’ll exit early. If you expect to repay at month five of twelve, the month-five number is the one that matters.
Ignoring the rhythm. A lower total with daily debits may cost you more in stress, dishonour fees and missed opportunities than a slightly dearer monthly loan.
Forgetting the extension. If there’s any real chance you’ll need more time, the extension cost belongs in the comparison.
Mixing secured and unsecured without adjusting. Property-secured loans have valuation and legal costs but may offer longer terms and larger amounts. Compare total dollars, but also compare what’s at stake.
Worked example: two quotes, two answers
Illustrative figures only — not a quote or an offer.
You need funds for a stock cycle you expect to finish in five months:
| Quote A (6 months) | Quote B (12 months) | |
|---|---|---|
| Fees deducted at settlement | $1,500 | $3,000 |
| Time-based cost per month | $1,400 | $1,100 |
| Early payout rule | Daily accrual | Daily accrual, no minimum |
| Total at month 5 | $8,500 | $8,500 |
| Total at month 6 | $9,900 | $9,600 |
| Extension if needed at month 6 | $1,200 fee | Not needed |
At month five they’re level. If the stock cycle drags past six months, A needs an extension while B keeps running without one. B’s longer term and fair payout make it the safer choice for the same expected cost. That kind of trade-off only appears when you line quotes up this way.
How many quotes should you get?
Enough to see a real range, but be aware that formal applications to several lenders can each lead to credit enquiries. A better approach is one well-described enquiry to someone who looks at your situation properly and matches it, rather than scattering applications. That’s how we work — see how it works.
What non-price terms belong in the comparison?
Two quotes with the same total dollars can still be very different loans. Before choosing, compare:
- Security. Property, a general security interest over business assets, a director’s guarantee — or a combination. What’s at stake if things go wrong?
- Conditions and covenants. Minimum account balances, reporting requirements, restrictions on further borrowing.
- Default terms. What triggers a default, and what it costs. ASIC’s guidance on unfair contract terms for small businesses is a reminder to read these clauses rather than skim them.
- Variation rights. Can the lender change terms during the loan, and on what notice?
- Communication. Who do you call if something changes? A named person is worth more than a generic inbox when an exit runs late.
Add a line for each to your comparison table. The cheapest loan on paper can become the dearest if its fine print works against you when plans change.
If one quote is clearly cheaper but weaker on these terms, it can still be the right choice — as long as you’ve made the trade-off deliberately rather than discovering it later.
Let us lay out the numbers for you
Tell us what you need and when you expect to repay. A lending specialist will present options with the six numbers above, so the comparison is straightforward. There’s no credit check to enquire, and your information isn’t sprayed across a panel of lenders. Answer the form carefully — especially your expected repayment date — because that date decides which quote is really cheapest.
Frequently asked questions
What should I compare between business loan quotes?
Net funds received, fixed fees, time-based cost for your likely holding period, early repayment charges, repayment rhythm, security required and the cost of an extension. Together these give total dollar cost and cash-flow fit.
Why is the net amount important?
If fees are deducted from the loan at settlement, you receive less than the approved amount. Two quotes for the same headline amount can leave different sums in your account.
How many quotes should I get?
Enough to see a genuine range, but be careful: formal applications with several lenders can each lead to credit enquiries. A single well-matched enquiry is often better than many scattered ones.
Is the lowest total cost always the best choice?
Not always. A slightly dearer loan with fair early payout, a better repayment rhythm or a cheaper extension may be the safer and ultimately cheaper option if plans change.