The Smart System · Tool 02

What does this really cost?

Know it in advance — before the paperwork tells you. Put in whatever you have been quoted and this turns it into dollars, and into a true annual cost measured against the money that actually reaches your account.

Learn how each lending product is actually underwritten →

Free. Nothing is sent anywhere. Private. It all runs in your browser.

Fact / calculation

Objective information or arithmetic based on what you enter.

Market context

Publicly available information about how commercial lending products and structures commonly work.

Smart Advance lens

Our educational CAS interpretation. It helps you ask better questions; it is not a lender decision or product recommendation.

What kind of finance is it?

Different products are priced in completely different ways, and comparing them on the headline number is how people get caught. Pick the one you are looking at and the form changes to match how it is actually quoted.

The product

The offer, as it was given to you

How much are you borrowing? ($)

How is it priced?

Interest rate

The headline number you were quoted. If a private or short-term lender quoted it per month, switch the dropdown rather than converting it yourself.

Over how long? (months)

How often do you repay?

Balloon or residual at the end ($)

Leave at 0 if there is none. On a chattel mortgage this is the balloon; on a lease it is the residual, and they behave differently for GST.

The fees — where most of the surprise lives

Establishment or set-up fee ($)

Is that fee taken out, or added on?

This changes the answer. Ask which one it is.

Ongoing fee, per repayment ($)

Any other one-off fees ($)

Legal, valuation, settlement, broker — anything you pay to get it.

Exit, discharge or early payout fee ($)

Charged when the facility ends. On short-term secured money this is often the second largest number in the contract, and it is rarely on the front page.

What is moving your price

Nobody is quoted a rate in a vacuum. A handful of things decide where in a lender’s range you land, and they matter more than which lender you pick. Tick whatever applies — it changes nothing in the arithmetic below, and it is the first thing a broker would ask.

You need it fast — days, not weeks. Speed is the single most expensive thing you can ask for. There is something on the credit file — a default, a judgment, an old arrangement. There is ATO debt, arranged or otherwise. The financials are behind, thin, or do not show the whole picture — late lodgements, a bad year, a restructure. The security is somewhere lenders are cautious about — a small town, a single-industry area, a specialised or hard-to-sell property. The asset is unusual, specialised or older — hard to value and harder to resell. The business is young — under two years on this ABN. Someone else is already secured against it — you would be second in line.

Two things this tool is for

Comparing unlike things. A factor rate and an interest rate cannot be compared on the number itself — only on total dollars over the same term, and on the effective annual cost. That is what the top figure is.

Finding the money you do not receive. If the establishment fee comes out of the advance, you are paying interest on money that never reached you. The tool measures the cost against what actually lands in your account, which is the honest way round.

Already have a written offer? Tool 03 checks it against the market →