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How much will a business loan cost you?

How much does a business loan really cost you? Taking a loan requires consideration of a number of factors. It is a financial decision that should not be taken lightly.

There are three main aspects to factor in how much a business loan will really cost you:

  1. Loan Amount
  2. Interest Rate
  3. Repayment Terms


Different types of loans have different interest rates. Secured loans, which are loans that require security (e.g. real estate), are deemed less risky. When the lender has assets to back the loan, they are more willing to offer a lower interest rate. On the other hand, unsecured loans are riskier and hence command a higher interest rates. Flexible and short-term loans also tend to have higher interest rates.

Interest rates and the loan duration will affect the total amount you have to repay. For example, the longer the loan duration, the more you have to repay when it is due. Additionally the higher the amount borrowed, the more interest you will eventually have to pay.

Find out the cost of a loan and repayments with our free loan calculator

With many lenders, there are typically ‘hidden’ or additional fees you’ll have to pay in taking a business loan. The reason for this is simple – lenders (banks and financing companies alike) are commercially driven and about their bottom line. The difference in the fees among lenders is typically due to the cost of overheads and the ‘ethical obligation’ to charge reasonable fees.

The types of additional or ‘hidden’ fees that can be charged on a business loan include:

  1. Application fees
  2. Service fees
  3. Electronic transfer fee
  4. Annual facility review
  5. Same-day processing fee


With any lender, watch for additional fees on your business loan, and make sure you are aware of all the fees that may be applicable before committing to a loan contract.

You will find that there will be a number of options available when looking for a business loan, and often only one or two will be good options for your specific business and needs. If you’d like to learn more about zero-collateral financing options and whether they’re suitable for your business, feel free to get in touch with us.