How much does a business loan cost?
At Moula, we keep pricing simple. We charge a 2% origination fee for direct customers. Other than that, you simply pay back what you borrowed (principal), plus interest. Our business loan interest rates range from 15.99% to 35.99% APR, and not a cent more in sneaky hidden fees. Also note, as with most commercial loans, these are fixed-rate loans. Use our business loan repayment calculator to get an estimate of loan interest and repayments.
What are the extra fees?
There are none. Nada. Zilch. No hidden fees.
Unlike with some types of loans and credit cards, we don’t charge any hidden fees. No direct debit fees, ongoing fees or penalties for early repayment. We charge fixed interest rates, not variable interest rates, so you won’t get any unwelcome surprises that can make it difficult to manage your cash flow.
What business loan fees and charges should I look out for from other lenders?
Application fees: Many lenders charge an application fee, payable even if your loan application is declined.
Direct debit fees: Some lenders will charge you a few dollars every time you make a repayment. Although this may only seem like small change, a $3 direct debit fee can turn into hundreds – or even thousands of dollars – if your repayments are weekly or daily. We don’t charge direct debit fees at all on our business finance, so these don’t appear in our business loan calculator.
Early repayment fees: If you’re ready to repay your loan early, congrats! At Moula, we’ll be delighted to see you close out your business loan early, and we won’t punish you for this, ever. Many lenders in Australia charge a penalty for early repayment of a fixed-term loan or charge you interest on all the remaining business loan amount. Always read your loan agreement carefully and know the loan terms and conditions are if you want to pay out early or make extra repayments.
What’s the difference between a simple interest rate and APR?
Some business lenders use simple interest rates when advertising unsecured business loans. Simple interest is calculated as if the full loan amount is paid off in one payment at the end of the loan term. It doesn’t consider principal repayments. However, most business loans have regularly scheduled payments – such as fortnightly or monthly repayments – that reduce the amount outstanding over the loan term. So, presenting a simple interest rate hides the real cost.
The annual percentage rate (APR) is the rate used to calculate the true cost of a loan. For example, if you translate a small business loan quoted at 18.95% simple interest into APR and base it on fortnightly repayments – which is the repayment frequency for Moula business loans – the APR of the loan is actually 33.55%. To be transparent, we use APR for our small business loan calculator and when quoting interest rates for all other business lending products. When comparing business loans calculators in Australia, check if they are using simple interest rates or APR.