What is an establishment fee?

A quick overview

An establishment fee is a one-off charge you pay to set up a business loan. It covers admin, processing, and lender costs. These can range from as little as $99 to over $2,000.

When you apply for a loan, there’s often an upfront charge called an establishment fee. It’s one of the most common fees in business lending and asset finance. This one-time fee helps cover the lender’s cost of setting up your loan. While it’s not always a huge number, it can catch you off guard if you’re not expecting it. In this article, we’ll explain what it is, how much it usually costs, and when it applies.

What is an establishment fee and why do they matter?

An establishment fee is a once-off charge added at the start of a loan. It covers things like loan processing, credit checks, admin, and document prep. Some lenders include it in your repayments, while others ask for it upfront. The cost depends on the loan size and lender, but it’s usually between $300 and $900 for asset finance deals. Bigger loans may attract higher fees. You’ll see this charge on your loan contract or quote, and it should always be factored into your total cost.

In the context of asset finance in Australia

In Australian business lending, establishment fees are common in chattel mortgages, finance leases, low doc loans, and equipment finance. It’s also very common for personal loans (like a car loan or wedding loan).

Each lender sets their own fee, and some waive it for larger clients or on promotional offers.

A good broker will always include it when comparing options and will ask the lender to reduce or waive the fee where possible. It’s also factored into the comparison rate, giving you a clearer picture of the loan’s real cost.

For example, a Brisbane-based last mile delivery business applies for a $60,000 vehicle loan. The lender includes a $495 establishment fee in the total loan amount. This adds slightly to the repayments, but the broker highlights it upfront so there are no surprises.