Comparison Rate (Business Finance)
Comparison Rate is a consumer-credit metric that combines the interest rate and most fees into a single number. It is legally required only for consumer loans under NCCP rules — not for commercial asset finance.
For business loans, vehicle finance, equipment finance, and Low Doc facilities, lenders do not provide comparison rates. Instead, business owners assess the true cost using repayment schedules, balloon or residual values, and total interest over the term.
Why It Doesn’t Apply to Business Loans
Comparison Rates were created to protect consumers buying cars or taking personal loans. Business finance is structured differently:
- commercial loans are not regulated by NCCP
- business fees vary widely between lenders, making a standardised rate misleading
- balloons, residuals, and tax outcomes heavily affect the cost
- many business loans are Low Doc or No Doc, which comparison rates cannot accurately model
This is why lenders and brokers instead provide full repayment schedules when structuring Low Doc Asset Finance, Equipment Finance, and Vehicle Finance.
What Business Owners Should Look At Instead
- Monthly repayment amount
- Total interest paid over the term
- Balloon or Residual Value
- Loan fees
- Tax treatment (GST, depreciation, instant asset write-off)
- Term length
- Fixed vs Variable Rate
You’ll never see a “comparison rate” on a business asset finance quote — but you will get a full repayment breakdown.
Related Switchboard Resources
For official guidance on deductions and asset write-offs, visit ato.gov.au.