Quick answer
Lenders quote differently for the same business loan because they have different funding costs, risk appetites, security preferences, fee models and loan structures. A bank funded by deposits prices differently from a private lender funded by investors. One lender may want property security, another only a guarantee. Fees, terms and repayment frequency also vary. To compare fairly, convert each offer into total dollars, money in hand and exit costs, and list the risks beside them.
Key points
- Lenders' own funding costs shape their pricing.
- Each lender sees risk differently and asks for different security.
- Fee models and loan structures can hide or shift cost.
- Convert every offer into the same dollar measures before choosing.
You’ve done everything right. Same business, same documents, same amount, same purpose. Yet one lender offers a five-year loan with a modest fee and wants a mortgage over your home, another offers twelve months unsecured with weekly repayments, and a third offers a different amount altogether. It can feel random. It isn’t. Each stall in the market is selling from a different supply chain, with different rules and different costs.
Understanding why offers differ helps you compare them fairly and negotiate with confidence.
Reason 1: Do lenders pay different prices for their own money?
Lenders are shopkeepers too. They buy money before they sell it, and they don’t all pay the same wholesale price.
- Registered banks fund much of their lending through customer deposits and wholesale markets. The Reserve Bank’s register listed 26 registered banks in August 2026, and their scale and deposit bases give them access to relatively cheap funding.
- Non-bank deposit takers, such as building societies, credit unions and some finance companies, raise money from the public through deposits or debt securities.
- Non-deposit-taking finance companies and private lenders fund themselves from shareholders, private investors, family offices or wholesale facilities. The Reserve Bank notes it doesn’t supervise these non-deposit-taking lenders.
A lender paying more for its own funds has to charge more to make a margin. That’s a big part of why bank and non-bank pricing differ, even before anyone looks at your business.
Reason 2: How does each lender see your risk?
Every lender has a credit policy: a set of rules and judgements about which deals it likes. Two lenders can look at the same business and see different risks.
| What the lender looks at | Lender A might think… | Lender B might think… |
|---|---|---|
| 18 months trading | “Too new; we want two years of accounts” | “Recent bank statements show strong, steady sales” |
| Old default, now paid | “Policy decline” | “Explained, historical, acceptable with security” |
| Hospitality business | “We’re cautious on this sector this year” | “We like this sector” |
| IRD arrangement in place | “Unresolved tax debt, too risky” | “Under control and being met” |
| Lumpy, seasonal income | “Inconsistent” | “Predictable seasonality” |
Where a lender sees more risk, it either declines, prices higher, lends less, shortens the term or asks for more security. That’s why you might get a generous offer from one stall and a cautious one from another.
Reason 3: What security does each lender prefer?
Security is how lenders protect themselves if things go wrong, and each has its favourite:
- Banks often want registered mortgages and general security agreements, plus director guarantees.
- Private lenders focus on property: first mortgages, second mortgages or caveats.
- Asset financiers prefer security over the specific asset being bought.
- Online lenders usually rely on personal guarantees and sometimes a general security over business assets.
The more comfortable a lender is with its security, the more it can lend and the lower its price per dollar. That’s why an offer secured over property may look cheaper than an unsecured one. It isn’t a like-for-like comparison: one costs more dollars, the other puts more at risk.
Not sure which security you’d be comfortable offering? Talk to a real person before you go further. There’s no credit check to enquire.
Reason 4: How do fee models move the cost around?
Lenders build their price from different ingredients. Some keep fees low and price the money higher. Others price the money keenly but add establishment, account, line or broker fees. Some deduct fees from the advance, some add them to the loan, some charge them separately. Some prepay interest. Some charge a minimum amount of interest regardless of when you repay.
None of this is necessarily unfair, but it makes offers hard to compare by eye. Two offers with very different-looking numbers can cost the same in dollars, and two that look similar can be far apart. The fix is to turn everything into total cost of finance, cost per $1,000 borrowed and money in hand.
Reason 5: Why do terms and repayment shapes vary?
Lenders also differ in how they want to be repaid:
- Term length. Online lenders often prefer months; banks may offer years.
- Repayment frequency. Daily, weekly, fortnightly or monthly.
- Interest-only periods or balloons. Lower repayments now, more later.
- Fixed or floating pricing. Certainty versus flexibility, with possible break costs.
A shorter term can mean less paid in total but much higher repayments. A longer term eases cash flow but costs more overall. A balloon makes repayments look low but leaves a lump sum to deal with. These differences change both the cost and the risk.
Reason 6: Why do exit and default terms matter so much?
Two offers can look identical until you read what happens if you leave early or fall behind. One might charge a small fixed fee to repay early; another might charge the interest for the rest of the term. One might give a grace period before default fees; another might apply default interest the day after a missed payment. These clauses don’t affect the headline, but they can decide the real cost. Our page on early repayment and exit costs explains the common types.
How do you compare offers that look nothing alike?
Put every offer through the same filter:
- Money in hand after deducted fees.
- Total cost of finance in dollars.
- Cost per $1,000 borrowed.
- Average monthly outlay against your cash flow.
- Exit cost at your realistic repayment point.
- Security, guarantees and covenants as risk flags.
The offer comparer does steps one to five automatically and turns step six into a clear list of flags. Then you can make a judgement that weighs cost against flexibility and risk.
How do you use the differences to your advantage?
Different offers aren’t just confusing; they’re useful. They give you leverage.
- Ask for the best bits. If one lender’s exit terms are better and another’s price is better, ask each to match the other’s strength.
- Ask why. “Why do you need a mortgage over my home when another lender is happy with security over the equipment?” Sometimes the answer reveals room to move.
- Restructure. Ask a lender to quote the same term or repayment frequency as a competitor so you can compare directly.
- Combine. Sometimes the best answer is two products: an asset loan for the machinery and a smaller credit line for working capital.
Our negotiation guide has scripts and tips.
What does this look like with real numbers?
Illustrative example. A Palmerston North landscaping supplier asks three lenders for $120,000 to buy stock and a forklift ahead of spring.
- The bank offers $120,000 over three years, secured by a general security agreement and a second mortgage over the owner’s home, with a small establishment fee and monthly repayments. Lowest cost per $1,000, highest security ask.
- A finance company offers $45,000 for the forklift secured over the forklift, and $70,000 for stock with a general security agreement, both over two years. Middling cost, no property.
- An online lender offers $100,000 over nine months, unsecured with director guarantees, weekly repayments and a fee deducted from the advance. Highest cost per $1,000, fastest, and $20,000 short of the need.
Running all three through the comparer, the owner sees that the finance company’s split structure costs only modestly more than the bank’s while keeping the home out of it. They negotiate the finance company’s establishment fee down and accept.
Ready to get an offer worth comparing?
Different lenders will always quote differently. The trick is getting offers from lenders who actually want your kind of deal, then comparing them properly. Tell us what you need: enquiring takes about a minute and doesn’t touch your credit file, your details aren’t hawked to a crowd of lenders, and a real person works out which stall is likely to give you the best-fitting offer. Please answer the form accurately so the comparison starts on solid ground. See if you qualify.
Frequently asked questions
Why did two lenders offer me different amounts?
Lenders use different rules to size loans: some lean on property value and loan-to-value ratios, others on turnover, profits or cash-flow coverage. They also apply different buffers and treat existing debts differently.
Why is one lender asking for property security and another isn't?
Each lender has its own view of your risk and its own preferred protection. A lender that can't take property may price higher and rely on guarantees; one that takes property can usually offer lower cost per dollar.
Is the cheapest offer always the best?
No. The cheapest offer may carry property risk, heavy exit costs or strict covenants. The best offer is the one whose total cost, flexibility and risk suit your plans.
Can I ask a lender to restructure their offer to match another's?
Yes. Asking a lender to change fees, term, repayment frequency, security or exit terms to match a competing offer is normal. Be specific and have the competing offer in writing.