Quick answer
To compare repayments of different frequencies, convert them to a monthly equivalent: multiply weekly repayments by 52 and divide by 12, fortnightly by 26 and divide by 12, and business-day repayments by the number of debit days in a year and divide by 12. Then choose the frequency that matches how money comes into the business, and check the monthly equivalent survives your quietest month.
Key points
- Weekly × 52 ÷ 12 = monthly equivalent.
- Fortnightly × 26 ÷ 12 = monthly equivalent.
- A weekly figure is more than a quarter of the monthly cost.
- Pick the frequency that matches your income, not the smallest number.
- Weekly to monthly
- × 52 ÷ 12
- Fortnightly to monthly
- × 26 ÷ 12
- Business-day debits
- × debit days ÷ 12
- Test
- Survives your quietest month
Repayment frequency is where business loan offers are easiest to misread. “$950 a week” and “$4,000 a month” look similar until you do the sums. This page shows how to convert any repayment to the same footing and how to pick the frequency that suits your business.
How do you convert repayments to monthly?
| Frequency | Payments a year | Monthly equivalent |
|---|---|---|
| Monthly | 12 | Repayment × 1 |
| Fortnightly | 26 | Repayment × 26 ÷ 12 |
| Weekly | 52 | Repayment × 52 ÷ 12 |
| Business days | About 250 (varies) | Repayment × debit days ÷ 12 |
A side-by-side example
Illustrative example. Three offers for the same $60,000 purpose (illustrative figures only):
| Offer A | Offer B | Offer C | |
|---|---|---|---|
| Repayment | $95 per business day | $950 weekly | $4,000 monthly |
| Payments a year | About 250 | 52 | 12 |
| Yearly total | About $23,750 | $49,400 | $48,000 |
| Monthly equivalent | About $1,979 | About $4,117 | $4,000 |
| Term | 24 months | 15 months | 15 months |
Offer A looks tiny per payment but runs longer. Offer B looks less than Offer C per month at first glance, but costs more once converted. The loan offer comparer does these conversions for you.
Which frequency suits which business?
| How money comes in | Frequencies that tend to fit |
|---|---|
| Daily card and cash takings | Weekly, or business-day if well managed |
| Weekly invoices or progress payments | Weekly or fortnightly |
| Monthly invoices or retainers | Monthly |
| Seasonal income | Flexible facility rather than fixed frequency |
The best frequency is the one where the repayment comes out soon after money comes in, not just before.
What are the risks of high-frequency repayments?
- They’re easy to underestimate. Small numbers add up.
- They can collide with wages, rent and BAS.
- Dishonour fees stack quickly if one payment fails.
- Daily debits leave little room for a slow week.
How do you test affordability?
- Convert the repayment to monthly.
- Look at your quietest month in the last year.
- Subtract normal costs: wages, rent, suppliers, tax set-asides and your drawings.
- The monthly repayment should fit in what’s left, with room to spare.
If it only fits in a good month, look at a longer loan term, a smaller amount or a flexible structure.
Does frequency change the total cost?
It depends on how the loan is calculated. On a loan priced on the reducing balance, paying more often can reduce the cost a little. On a loan with a fixed amount repayable, frequency only changes timing. Either way, compare the total dollar cost too; see total cost.
How do you set a repayment up so it never bounces?
A missed repayment costs more than the dishonour fee. It can trigger default interest, a call from collections and a note on how the lender sees you next time. A few habits keep repayments clean whatever the frequency:
- Line the debit up with your income. If card settlements land on Tuesday, a Wednesday debit is safer than a Monday one. Many lenders will move the day if you ask at the start.
- Keep a small buffer in the account the loan debits from, roughly one repayment’s worth.
- Separate tax money. Moving GST and PAYG into a different account each week stops a BAS payment and a loan repayment colliding.
- Watch for public holidays. Business-day debits can shift, and two can land close together.
- Tell the lender early if a payment will be tight. Most would rather agree a short arrangement than chase a dishonour.
| Habit | What it protects against |
|---|---|
| Debit the day after income lands | Timing gaps |
| One repayment held in reserve | A slow week |
| Separate tax account | BAS and loan clashing |
| Calendar of debit dates | Holiday shifts |
| Early call to the lender | Default fees and listings |
If you already have a loan whose frequency doesn’t suit, ask whether it can be changed. A variation fee may apply, but it’s often cheaper than a run of dishonours.
Get repayments that fit your cash flow
Tell us how money comes in and we’ll look for structures whose repayments match it. Making an enquiry doesn’t touch your credit file; a check only follows if you decide to proceed. We don’t share your enquiry around a crowd of lenders. A real person converts every option to the same terms so you can see exactly what each would ask of you each month.
Please be accurate on the form about turnover and any seasonal patterns. Start your enquiry, or convert an offer you already have with the loan offer comparer and then ask us to compare.
Frequently asked questions
Why is weekly not just monthly divided by four?
Because most months are longer than four weeks. There are 52 weeks in a year, so a weekly repayment is paid 52 times, which works out to about 4.33 times a month.
Do more frequent repayments save money?
On some loans that calculate interest on the reducing balance, paying more often can reduce the cost slightly. On loans with a fixed total repayable, frequency doesn't change the total. Check how your loan is calculated.
Why do some lenders take daily repayments?
Some short-term lenders debit each business day so repayments track daily takings and they see problems early. They can be hard to manage, so convert to monthly and budget carefully.
Can I change my repayment frequency later?
Sometimes, but there may be a variation fee. Choose carefully at the start.
Which frequency suits a café or retailer?
Weekly often suits businesses with daily card takings, as long as the monthly equivalent is comfortable. Monthly suits businesses paid by monthly invoice.