Compare business loans
Put up to three business loan offers side by side, including factor-rate loans and fees, and see which one really costs least.
Why compare business loans on total cost?
Business loan offers are quoted in different ways: an annual interest rate, a monthly rate, a factor rate, or a fixed fee. They also differ in term, repayment frequency and fees. The headline number rarely tells you which offer is cheaper. The calculator converts each offer into the same three measures: the repayment, the total you'll pay, and an effective annual rate that includes upfront and monthly fees.
How does the effective annual rate work?
The effective annual rate is the yearly interest rate that would produce the same repayments, after taking off upfront fees from the amount you actually receive and adding ongoing fees to each repayment. It lets you compare a 14% loan with a $1,500 fee against a 1.22 factor loan repaid weekly on equal terms. It's a comparison tool, not the rate a lender will quote you.
What is a factor rate?
A factor rate is a multiplier on the amount borrowed. Borrowing $100,000 at a factor of 1.22 means repaying $122,000. Because the fee is fixed and repayments start straight away, the effective annual cost is much higher than 22%, especially on shorter terms with daily or weekly repayments. Our guide to short-term business loans explains the conversion.
What else should you compare?
- Early repayment terms. Some loans rebate unused interest if you pay early. Many factor-rate loans don't.
- Security and guarantees. A slightly cheaper loan that needs your home as security may not be the better deal.
- Repayment frequency. Daily repayments suit businesses paid daily and can strain those paid monthly.
- Speed and certainty. A conditional bank approval isn't worth much if the deadline passes before settlement.
For a single loan, the business loan repayment calculator shows the yearly breakdown.
Compare business loans: common questions
What's the best way to compare business loans?
Compare the total amount you'll repay, including every fee, over the same period, and check what happens if you repay early. The effective annual rate in this calculator puts interest-rate and factor-rate loans on the same footing. Then weigh up security, speed and flexibility alongside cost.
Why is the effective rate higher than the quoted rate?
Upfront fees reduce the money you actually receive, and ongoing fees add to each repayment, so the true cost is higher than the quoted rate. For factor-rate loans, the fixed fee combined with frequent repayments from the start pushes the effective annual rate well above the factor.
Are daily repayment loans more expensive?
Not because of the frequency itself, but daily and weekly loans are usually short-term and priced with factor rates, which often makes them expensive on an annual basis. Paying more frequently also takes cash out of the business before customers pay, which can create the next cash gap.
Can a broker get me a better offer?
A broker can compare lenders you may not know about, including non-bank and private lenders, and present your application to the ones most likely to approve it on good terms. FundFox is usually paid by the lender, and any broker fee is disclosed in writing before you proceed.
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