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Understand the cost of your business loan

We want you to have the information you need to understand and assess the cost of your small business financing when you are given a Prospa offer

Choosing a lender

Prospa is Australia’s #1 online small business lender.

We are a founding member of the AFIA Code of Lending Practice and fully compliant with Code requirements.

This means we will keep 8 key promises to you under the Code:

  1. Be honest and ethical
  2. Give you clear information about our loan products
  3. Consider your financial circumstances when lending to you
  4. Deliver high customer service and standards
  5. Deal fairly with any complaints
  6. Focus on our customers
  7. Comply with our legal and industry obligations
  8. Support and promote this Code

Talk to a business lending specialist

Talk to a business lending specialist

Talk to a business lending specialist

Talk to a business lending specialist

Talk to a business lending specialist


Frequently asked questions

It costs nothing to apply for finance with Prospa, and there is no obligation to proceed once you receive an offer. In order to be able to give you a SMART Box™ you will need to complete an application so we can provide pricing that will reflect the individual profile of your business.

The Disbursement Amount is the amount of the loan that would be available to you (if approved) and paid into your business bank account. It may be less than the Loan Amount if a portion is used to pay off any amounts owed from a prior loan or an amount owed to a third party, or your origination fee.

If your business is approved, the loan agreement will set out the Total Repayment Amount, clearly showing your total payback. This can be a key metric when considering Return on Investment (ROI) i.e. evaluating the benefits of borrowing against the cost, or when comparing different product offers from different lenders.

The amounts set out in the pricing disclosure tool, including the interest rate, reflect the individual risk profile of the approved business applicant.

We provide a loan summary sheet that clearly identifies the annual simple interest rate for the loan and the total interest expense. In addition, as a founding signatory to the AFIA Code of Lending Practice we have committed to provide a pricing disclosure tool (known as a SMART Box™) with a number of other metrics to help businesses understand and assess the cost of their small business loan. For example, a $10,300 loan on a 12 month term (comprising of a $10,000 disbursement and $300 origination fee) with a simple interest rate of 9.9% p.a. would have a total repayment amount of $11,320.

The annual simple interest percentage rate is used to calculate the total amount of interest expense a business will pay for use of the loan amount. The Total Interest Percentage (TIP) in the pricing disclosure tool is the interest expense expressed as a percentage of the loan amount.

Please note, not all amounts, term lengths or rates will be available to all applicants. Interest rates vary due to factors including the amount borrowed, the industry the business operates in, how long the business has been running, whether the business has sufficient cash flow to support the loan, and the overall ‘health’ or creditworthiness of the business.

Prospa provides interest rates based on the risk profile of the applicant business. If you wish to apply, you should call on 1300 882 867 or complete our easy online application.

This fee covers the one-off costs associated with processing and establishing the credit facility. We will clearly display this fee in our pricing disclosure.

There are no hidden fees for our Small Business Loans, and you’ll know exactly how much and when you need to pay from day one. There’s no compounding interest and no additional fees (as long as you make your repayments on time).

Once you have completed the application process we will let you know the total amount we may be able to offer to lend your business at that point in time, and this is known as the Loan Amount. If approved, the total amount of your loan will depend on the specific circumstances of your business.

We’ll provide approved business applicants with a Total Cost of Credit amount in the SMART Box™ pricing disclosure tool, which is the total amount your business would pay in interest and other fees for the loan. It assumes you pay off the loan in its entirety according to the agreed payment schedule, so it doesn’t include fees and other charges you can avoid, such as late payment fees and dishonour fees. If approved, you can refer to section 12 in Schedule 2 of your business loan agreement for details of charges you can avoid.

We also set out the loan Term (expressed in months) in the loan agreement, which shows the period over which the business will repay the loan. This is the period between when you receive the funds (your disbursal date) and the date of your last contractual payment. We round the Term to one decimal point because variations can occur due to variables such as day count convention and treatment of public holidays. The effective Term of your loan may be different to account for any customised repayment schedule, for example the day repayments start.

To help businesses avoid missing repayments we provide flexibility to fit in with your cash flow cycle. Your loan summary will indicate whether your agreed repayments are daily or weekly and the number of repayments your business would need to make. These are automatically deducted from the nominated business account pursuant to the direct debit arrangements.

You can choose to repay the entire amount of your loan early at any time.

If you decide to do this please speak to our friendly business loan specialists on 1300 882 867. They will provide you with repayment details and an early payout figure. This will be calculated as the total of the remaining principal amount and any accrued interest at the date of early payout, plus 1.5% of the remaining principal and any outstanding fees.

A different calculation applies for businesses who entered into a loan contract before 1 October 2020. If this is you, the level of discount applied to your early repayment amount will depend on how far you are into the loan term and, provided you are not in default, will be at least 25% of the remaining interest payable on your loan. Please call us on 1300 882 867 to find out more.

APR stands for Annual Percentage Rate and can help you compare different loan products. Whereas your Total Interest Percentage applies to the full loan amount, an APR is a rate that applies to your loan’s reducing balance over time and is standardised on an annual basis regardless of your actual term. While APR can be used for comparison purposes, it is not used to calculate your interest expense.

Typically, APR is higher for short-term loans and lower for long-term loans. For example, a mortgage of $500,000 can have a low APR of 5% but a total interest percentage of 200%, meaning a total repayment of $1 million over 30 years. Businesses might want to consider the total repayment amount when comparing different product offers from different lenders.

Other questions? Talk to a specialist