What Fees Apply to Equipment Finance?

Key highlights

• Establishment fees are common at the start of a deal
• Some lenders charge a small monthly account fee
• Early-payout and documentation fees can apply depending on the lender
• Judge deals on total cost, not the rate alone

Establishment and application fees

Most equipment finance carries an upfront establishment or application fee to set up the facility. It covers the lender's costs in assessing and documenting the deal, and it is usually a set dollar amount rather than a percentage. The size varies between lenders, and it can often be added to the loan rather than paid separately, though doing so means you pay a little interest on it. When comparing offers, always include this fee in the picture, because a slightly lower rate paired with a high establishment fee can end up costing more than a marginally higher rate with a modest one.

Ongoing account fees

Some lenders charge a small monthly or annual account-keeping fee for the life of the facility. Others build everything into the rate and charge nothing ongoing. Individually these fees look minor, but over a multi-year term they add up, so they belong in any real comparison. When you weigh two deals, add the ongoing fees across the full term alongside the interest to see the true difference. A deal that looks cheaper on rate can lose that advantage once modest monthly fees are counted over several years, which is why total cost is the fairer measure.

Documentation and broker fees

Depending on the lender and how the deal is arranged, you may see a documentation or settlement fee covering paperwork and registration, and in some cases a broker fee. Many brokers are paid by the lender rather than by you, but arrangements differ, so it is always fair to ask how a broker is remunerated and whether any fee applies to you. Transparency here is reasonable to expect. A good broker will explain exactly what you pay and to whom, so there are no surprises at settlement and you can factor everything into your comparison from the outset.

Early payout and end-of-term costs

If you repay the finance early, some agreements apply an early termination or payout fee, and the way interest is calculated can affect what you save by paying out. There may also be costs at the end of the term, particularly where a balloon or residual is involved and you choose to refinance or pay it out. These are worth understanding before you sign, especially if you might upgrade the asset before the term ends. Ask the lender to explain the early-payout position clearly so you know your options and costs if your plans change down the track.

The number that really matters

Because fees vary so much, the rate alone is a poor way to compare deals. The figure that matters is the total amount payable over the full term, interest and all fees included. That is what tells you which deal is genuinely cheaper. On tax treatment of fees and interest, general rules apply but circumstances differ, so check with your accountant. A broker can present offers on a like-for-like total-cost basis, so the fees are visible rather than buried. Overdrive does this across 80+ lenders and sets each fee out plainly, with figures indicative and subject to lender assessment.

Fees are a normal part of equipment finance, but they are also where a seemingly cheap deal can quietly become expensive. The safeguard is simple: ask for the total cost, fees included, and compare on that. Overdrive's dedicated broker, Simon Kendrick, compares 80+ banks and non-bank lenders on one application and sets out every fee plainly. Request a free quote and see the real cost of each option, not just the headline rate.