In the first of a series of articles on bank fees, Matt Skinner looks at the business borrowing fees the major banks charge

Banks have made much of removing fees over the past few years. In some cases this has come as they've scrapped product offerings such as accounts and credit cards and in doing so reduced the number of fees they charge. However, there are still plenty of fees they continue to collect.

Among fees culled, Westpac announced in September it was stopping charging nine fees related to the establishment and administration of loans and overdrafts. Across nine key retail banks fee and commission income dropped $107.5 million, or 20%, to $430.8 million between June 2018 and June 2022.

In terms of fees banks continue to charge, common examples of loans banks offer include business overdrafts, residential mortgages and credit cards that all still have fees attached.

There are five main areas where ANZ, ASB, BNZ, Kiwibank and Westpac charge fees: Business borrowing, card service fees, international service fees, personal borrowing fees and mortgage fees. Each of these will be covered in a five part series of articles. Firstly we look at business borrowing fees.

Here is a table for visual comparison:

Westpac

Where business borrowing is concerned Westpac charges a minimum from $400 with an establishment fee up to 1% of the facility limit or loan amount. This is for the establishment of new loans, overdrafts (including temporary limits), re-documented loans, loan variations, resolving accounts, guarantees and bond facilities. 

For unarranged overdrafts Westpac charges a $9 fee per month and also an interest rate of 19.95% p.a. calculated on a daily basis.

Kiwibank

Kiwibank charges an application fee for business loans at a minimum of $25 and $75 for overdrafts. They also charge an overdraft fee of 0.10% of the overdraft limit per month at a minimum fee of $5. 

There is an overdraft over limit fee at Kiwibank when you exceed your overdraft limit by more than $20 at any time during the month. This is $10 per month and will show on the account statement you access the overdraft from as an account out of order fee. An unauthorised/excess rate of 22.00% p.a will also be charged.   

Kiwibank also charges a temporary overdraft arrangement fee when you ask for a temporary overdraft or a temporary increase in your overdraft. This is 0.25% of the overdraft limit, or the amount of the increase. Minimum fee $75.

Kiwibank charges an early exit fee when your loan is repayable over more than three years and you fully repay the loan within three years from the date you first draw down your loan. It’s $250.

There is a lending restructure fee at Kiwibank when you ask to change your existing lending. This covers splitting an existing loan, combining existing loans, changing the term or interest only period of an existing loan, changing the type of an existing loan (but not changing an existing loan to a fixed rate loan or refixing an existing fixed rate loan), changing the repayment type on an existing loan from principal and interest to interest only. The fee is $25 per change and applies per changed loan if changing multiple existing loans.

A security restructure fee is charged at Kiwibank when you ask to change an existing security. This applies when changing the identity of the owner of the security, changing the security, changing the identity of the borrower, or changing the identity of the guarantor. That will be $135 per request.

ANZ

ANZ states in their guide that unless otherwise advised the following fees apply to the ANZ Business Current Account, ANZ Cheque Account, ANZ Commercial Cheque Account and ANZ Business Premium Current Account.

ANZ has an overdraft application fee for businesses of a minimum amount of $75 or 1% of the approved credit limit or increase, whichever is greater. 

There is a monthly overdraft management fee at ANZ of 0.12%, minimum of $5 a month, which is calculated and charged monthly as a percentage of the highest agreed overdraft credit limit available during that month.

ANZ charges an unarranged overdraft fee of $3, charged each month if you exceed your approved overdraft limit, or your account becomes overdrawn by more than $10 for more than one day. This is charged in addition to excess interest. The Excess Interest Rate is the Consumer Overdraft Base Rate plus a margin of 15% p.a.

The ANZ Agri Current Account for agriculture businesses has an overdraft application fee of 0.5% of the approved limit, for a new or increased limit at a minimum charge of $100.

The monthly overdraft management fee for Agri Current Accounts is 0.0625%, minimum of $5 per month. It's calculated and charged monthly as a percentage of the highest agreed overdraft credit limit available during that month.

For ANZ commercial overdrafts the overdraft management fee, and overdraft application fees apply, as agreed in the facility agreement.

ANZ's Business Flexible Facility has an application fee of up to 1% of the loan amount with a minimum of $250. The monthly overdraft management fee is 0.50% p.a. calculated and charged monthly as a percentage of the highest agreed flexi limit during that month, minimum $5 a month.

The ANZ commercial flexible facility application fee is up to 1% of the loan amount with a minimum of $250. Unless agreed otherwise in your facility agreement, the monthly overdraft management fee is 0.12% calculated and charged monthly as a percentage of the highest agreed limit available during that month.

ANZ has term loans for business customers, charging 1% of the loan amount with a minimum of $250 for the loan approval fee. $250 for the switching fee, payable any time you switch from a variable rate loan or vice versa. There's also a loan top-up fee of up to 1% of the increased loan amount, minimum $250.

ASB

ASB has different borrowing fees based on the type of business account, such as the Business Focus Account for businesses with turnover of less than $2 million p.a. 

This account has an establishment limit fee at 1.00% of the approved overdraft limit, minimum charge of $25. 

The monthly overdraft facility fee is 0.12% (1.44%p.a.) of the limit or highest daily overdrawn balance, whichever is greater at a minimum charge of $5.00 per month. This is waived on limits of $1,000.00 or less. 

A monthly unarranged overdraft fee applies for unarranged overdrafts exceeding $20.00 at a minimum charge of $10.00 and alternatively charging 0.12% of the limit or highest daily overdrawn balance, whichever is greater.

The ASB commercial flexible finance facility can apply to any business, subject to credit and lending criteria. The same establishment of limit fee is in place for this account.

The monthly overdraft facility fee for arranged overdrafts, sometimes referred to as a line fee or undrawn fee, is 0.05% (0.60% p.a) payable monthly on the difference between the average balance and the overdraft limit. 

If your Commercial Flexible Finance Facility has an average credit balance for the month, the undrawn fee will be charged on the full overdraft limit. Minimum charge is $5.00 per month. 

The monthly unarranged overdraft fee is 0.12% of the limit or highest daily overdrawn balance, whichever is greater. Minimum charge is $10.00, unarranged debit interest rates will also apply.

An ASB Business Account, Commercial Credit Facility, for any business, subject to credit and lending criteria, and society account not-for-profit organisations, have the same establishment of limit fee, monthly overdraft facility fee (not waived on limits of $1000 or less) and monthly unarranged overdraft fee as the Business Focus Account.

ASB charge an Alterations to Security Fee and Change Parties to Loan Agreement fee of $125.

BNZ

BNZ has the Business First Transact Pay As You Go Plan, MyMoney for Business, Current Account and Non-Profit Organisation accounts with overdraft facility fees of 0.15% per month (minimum $5.00 fee). The bank also has an unarranged overdraft fee of 0.15% per month (minimum $5.00 fee). 

These are payable monthly in arrears on an arranged or unarranged overdraft. Calculated on the overdraft limit or actual overdraft utilised, whichever is the greater. 

You also pay interest at the bank’s applicable business overdraft rate plus a margin on the overdrawn amount (up to your arranged overdraft limit) as set out in your overdraft facility letter. 

If you go into unarranged overdraft (including if you go over your arranged overdraft limit), interest at the bank’s business overdraft base rate plus 10.00% p.a. (unless advised otherwise) also applies to the debit balance, calculated daily and paid monthly.

The BNZ market connect account has an overdraft facility fee of 0.10% per month (min $5.00) and unarranged overdraft fee of 0.10% per month (min $5.00).

BNZ writes in their facility fees brochure that for all non-personal lending may incur 1% of the loan being charged. The discharge/partial discharge of general security agreement is listed as a $100 fee.

"BNZ also has a Market Connect product for Commercial customers. Establisment Fee minimum is $150, Monthly fee is Min $5 or 0.10% per month.

Unarranged overdraft fee is Min $5 or 0.10% per month, plus interest: Market Connect base rate + 8.00%." says the BNZ media team.