Quick answer
A short-term property-secured loan costs more than interest alone. Expect upfront costs at settlement (establishment, our legal fees, valuation, searches and registration), interest that's paid monthly, prepaid or capitalised, possibly a line fee on a facility, and exit costs such as a discharge fee and registry fees. Every loan is priced on its own circumstances, so ask for each cost in dollars and for the net amount you'll actually receive.
Key points
- Costs fall into three stages: at settlement, while the loan runs, and at exit.
- Interest can be paid monthly, prepaid from the advance or capitalised onto the balance.
- Upfront costs and prepaid interest usually come out of the loan, so the cash you receive is less than the loan amount.
- Late exits are where costs grow — know the extension and default terms before you sign.
- Pricing is set on each file; compare offers on total dollars, not headline numbers.
- Cost stages
- Settlement, term, exit
- Interest options
- Monthly, prepaid, capitalised
- Ask for
- Every cost in dollars
The headline price of a short-term loan tells you very little on its own. Two offers that look similar can land very differently once you add up what’s paid on settlement day, what accrues while the loan runs and what happens on the way out. This page lays out the structure — the building blocks every short-term property-secured loan is made of — so you can read an offer properly.
We don’t publish rates. Every loan is priced on its own circumstances: the property, its state and suburb, where we sit on title, the loan size and how solid the exit is. What we can show you is how the costs are put together.
What do you actually pay for on a short-term loan?
Think of the costs in three stages:
- At settlement — the one-off costs of setting the loan up.
- While the loan runs — interest, and sometimes a line fee.
- At exit — the costs of paying it out and clearing the title, plus anything triggered by a late or early exit.
The government’s business portal defines interest simply as “the cost to borrow money” (business.gov.au). On a short-term loan it’s only one part of that cost — the one-off items matter more than they do on a long bank loan, because they’re spread over months rather than decades.
Which costs come out on day one?
| Cost | What it covers | Who receives it | When it’s paid |
|---|---|---|---|
| Establishment fee | Our assessment, approval and set-up | Us | Deducted from the loan at settlement |
| Our legal fees | Preparing loan, mortgage and guarantee documents | Our solicitor | Usually deducted at settlement |
| Your own legal advice | Explaining the documents to you; sometimes required for guarantors | Your solicitor | Paid directly or at settlement |
| Valuation fee | An independent valuer’s report on the property | Valuer | Often before settlement, sometimes deducted |
| Searches | Title, company, ABN and other searches | Search providers | Usually deducted at settlement |
| Registration fees | Lodging the mortgage or caveat with the land registry | State land registry | At settlement |
Registry fees are set by each state’s land registry — Victoria’s, for example, publishes its current schedule with fees from 1 July 2025 (Land Use Victoria). They’re small next to the other items but they appear on every settlement statement.
For what the valuer looks at, and how to avoid paying for a second report, see valuations for short-term loans.
How is the interest structured: monthly, prepaid or capitalised?
This is the choice that most changes how a short-term loan feels day to day.
- Paid monthly. You pay interest each month from the business’s cash flow. The full loan amount reaches you at settlement, but you need the monthly cash to service it.
- Prepaid. Interest for an agreed period is deducted from the loan at settlement and held by us. No monthly payments, but less cash in hand on day one.
- Capitalised. Interest is added to the loan balance as it accrues and repaid at exit with the principal. No monthly payments and no deduction on day one, but the balance grows, so we size the loan to leave room for it within the property’s equity.
Prepaid and capitalised interest are why private lenders can lend to businesses with tight cash flow: there’s nothing to repay until the sale, refinance or payment that forms the exit. The trade-off is that the equity has to carry the cost for the whole term.
Line fees. If the loan is a facility you draw on over time — common in development or staged funding — there may be a line fee on the approved limit. Ask whether it applies to the full limit or only the undrawn part.
What costs show up at the end — or if things run late?
At a normal exit:
- Discharge fee — our charge for processing payout and releasing the security.
- Registry fees to discharge the mortgage or withdraw the caveat.
- Legal costs on the discharge, if not already covered.
If the exit runs late, three more items can appear:
- Extension or rollover fee for a new term.
- Default interest — a higher charge that can apply once the loan is overdue.
- Enforcement costs if things go seriously wrong.
That’s why the exit date matters as much as the price. Test your timeline honestly with our exit date check, and if you’re already in a short-term loan that’s running out, caveat loan refinance explains the options.
Want a full cost breakdown for your own situation, in dollars? Ask for one with a 60-second enquiry.
Illustrative example: working backwards from the cash you need
Illustrative only — no real client, and no pricing implied.
A Sunshine Coast boat builder needs $250,000 in the bank to pay for engines on a confirmed order. The exit is the customer’s final payment on delivery, about five months away. The owner’s house is worth about $1,500,000, with $500,000 owing on a bank loan she wants to keep, so the structure is a registered second mortgage.
The mistake is to ask for a $250,000 loan. The right question is: what gross loan delivers $250,000 net? The working looks like this:
| Line | What goes in it |
|---|---|
| Cash needed in hand | $250,000 |
| Plus: establishment, legal, valuation, searches, registration | Taken from the advance at settlement |
| Plus: prepaid interest for the expected term | Held back by us at settlement |
| Equals: gross loan amount | The figure on the mortgage |
| Plus at exit: discharge and registry fees | Paid from the customer’s final payment |
If the delivery slips by a month, the questions become: is there prepaid interest left, and what does an extension cost? Knowing that before signing is what lets the owner decide whether to build in a buffer.
How do you compare two offers fairly?
Put both offers on the same page and ask each lender for:
- The net advance — cash in your account at settlement.
- Every upfront cost in dollars.
- Total interest in dollars for the expected term, and how it’s structured.
- Exit costs — discharge and registry fees.
- What a one-month extension would cost, in dollars.
- Early repayment terms.
The cheaper-looking headline doesn’t always win once those six lines are added up. Total dollars, matched to a realistic exit date, is the only fair comparison. For how private pricing stacks up against a bank in general terms, see private lender vs bank.
Get your own numbers, not a brochure figure
A cost breakdown is only useful if it’s built on your property, your title position and your exit date. That’s what we put together once we understand the file.
The enquiry takes about 60 seconds, and there’s no credit check when you first enquire. We don’t send your details to a crowd of lenders — a real person on our credit team reviews your situation and calls you with a structure that suits it. Please complete the form accurately, especially the property’s location and state, what’s owed on it and the date you need funds, so the breakdown you get is the right one.
Frequently asked questions
What fees are charged on a short-term business loan?
Typically an establishment fee, our legal costs, a valuation fee, title and company searches, registry fees to register the mortgage or caveat, interest, sometimes a line fee on a facility, and a discharge fee with registry fees when the loan is repaid.
What is capitalised interest?
Interest that's added to the loan balance instead of being paid each month. You make no repayments during the term, and the interest is repaid with the principal at the end. We allow for it when sizing the loan.
What is prepaid interest?
Interest for an agreed period that's deducted from the loan at settlement and held by us. It means no monthly repayments, but it reduces the cash you receive on day one.
Why is the amount I receive less than the loan amount?
Because upfront costs — establishment, legal, valuation, searches, registration — and any prepaid interest are usually deducted from the advance at settlement. Always ask for the net advance figure.
Why don't you publish rates?
Because every short-term loan is priced on its own facts: the property, its location, the title position, the loan size, the exit and the timeframe. A published number would be wrong for most people. You'll get a full cost breakdown for your file before you commit.
What happens if I repay early?
It depends on the offer. Some loans can be repaid early with little extra cost; others include a minimum interest period or an early repayment fee. Check this before you sign, especially if your exit might arrive sooner than planned.