Key Takeaways
- Business loan interest rates in Australia have just moved again: after the RBA lifted the cash rate to 4.60% on 29 September — a 15-year high and the fourth rise of 2026 — major banks repriced their business lending from early October, with one big four bank lifting most business reference rates by 0.25 percentage points from 9 October.
- The advertised rate and your rate are different things. In early October, comparison panels showed secured business loan rates advertised from around 7% p.a. and unsecured loans from around 11% — but the average across a 50-plus lender panel was in the mid-teens. Risk-based pricing decides where you land.
- Security is the single biggest lever. The gap between a secured and an unsecured business loan is typically around 4–6 percentage points — on a $250,000 loan, that difference is worth more per year than most businesses spend on their accountant.
- RBA lending data reported this year shows small businesses pay roughly 1.5–1.7 percentage points more than larger businesses on new loans — which is exactly why presentation, financials and lender selection matter more for SMEs than for anyone else.
- All figures here are indicative, move constantly and vary with your profile. This is general information, not credit or financial advice — confirm current rates with your lender or broker before making decisions.
If you’ve searched for business loan interest rates in Australia lately, you’ve probably noticed two things: the numbers keep moving, and no two sources agree on what you’ll actually pay. Both observations are correct. With the cash rate at 4.60% after four rises this year — we covered what the September rise means for your mortgage and your business loan when it landed — lenders have been repricing business credit all year, and the latest round of increases took effect in just the past week.
This guide is about the second problem: why the rate in the ad is rarely the rate in your offer, what different types of business finance genuinely cost right now, and — most usefully — the levers you can pull to pay less. It’s written from the broker’s side of the table, where we see the rates businesses are actually offered, not just the ones used to win clicks.
Where Business Loan Interest Rates Sit in October 2026
Start with the verified facts. The RBA’s cash rate — the base ingredient in every variable business loan — has risen four times in 2026 and now sits at 4.60%, its highest level in 15 years. The board meets again on 3 November, and as of early October the big four banks were split on the outcome: two forecast another 0.25% rise, two forecast a hold. Nobody serious is forecasting cuts in the near term.
Lenders have passed the September rise through to business borrowers quickly. CommBank, for example, published increases of 0.25 percentage points across most of its business lending reference rates effective 9 October 2026 — taking its residential-equity-secured business rate to 8.60% p.a., its variable base rate to 10.68% and its overdraft index rate above 12%. Other lenders have made or flagged similar moves. If your business loan is variable and your lender has passed on each 2026 rise in full, your rate is around a full percentage point higher than it was in January.
What does the wider market look like? In early October, one major comparison panel (updated 1 October 2026) showed secured business loans advertised from around 7% p.a., unsecured business loans from around 11% p.a., and an average of roughly 16% p.a. across more than 50 lenders once online and fintech lenders were included. That spread — single digits at one end, well into the teens at the other — is the real story of business lending in 2026, and it’s why the question worth asking isn’t “what are rates?” but “what decides my rate?”
Why the Rate You’re Offered Isn’t the Rate in the Ad
Unlike home loans, business lending is almost entirely risk-priced. The advertised “from” rate goes to the strongest file the lender can imagine; everyone else is priced up from there. The main inputs, roughly in order of impact:
Security. A loan secured by residential or commercial property sits at the bottom of the rate range; a loan against equipment or vehicles sits in the middle; an unsecured loan sits at the top. RBA data reported this year also shows small businesses pay around 1.5–1.7 percentage points more than larger businesses on new lending — partly because fewer small businesses can offer hard security. Time in business and turnover. Two or more years of trading with clean financials opens bank pricing; under 12 months usually means fintech pricing. Industry. Lenders tier industries by volatility — hospitality and construction typically price higher than, say, professional services. Credit history. Defaults, dishonours and overdue ATO lodgements push you up the curve — if tax debt is the issue, our guide to refinancing business tax debt covers that specific problem. Loan size and term. Larger, longer loans against good security generally price better than small, short, unsecured ones.
One more trap: not every lender quotes an annual interest rate. Short-term lenders often quote a factor rate (borrow $100,000, repay $115,000 — a “1.15”). Converted to an annualised rate over a six-month term, that can be far more expensive than it sounds. Always compare the total cost of credit, not the headline number.
What Different Types of Business Finance Cost Right Now
The ranges below are indicative, drawn from published lender reference rates and comparison-panel data in early October 2026. They’re a map, not a quote — your figure depends on everything in the section above, and rates may move again after the RBA’s 3 November meeting.
| Finance type | Indicative rate range (p.a.) | What drives your rate |
|---|---|---|
| Commercial property loan | Low 7s to high 8s | Property type and location, LVR, lease strength, financials |
| Property-secured business loan | From around 7% to around 10% | Equity offered, trading history, purpose of funds |
| Equipment & asset finance | High 7s to low 12s | Asset type and age — new, income-producing assets price best |
| Business overdraft / line of credit | Low 10s to mid 14s | Secured vs unsecured, limit size, account conduct |
| Unsecured business loan | From around 11%; commonly mid-teens to 20%+ | Monthly turnover, time trading, credit file, repayment term |
| Invoice finance | Priced as fees + margin rather than one rate | Debtor quality, invoice volume, industry |
These ranges shift with every RBA move and every lender repricing round — treat them as a guide to relativities (what’s cheap versus what’s expensive) rather than quotes, and confirm live pricing before you commit. If you’re still weighing up which structure fits the need, our small business loans guide walks through when each product earns its keep.
What the 2026 Rises Mean for Your Repayments
A percentage point doesn’t sound like much until you run it through a real loan. On a $500,000 variable business loan repaid over 10 years, moving from 8.5% to 9.5% adds roughly $270 a month — about $3,250 a year in extra interest, before any tax effects. On a $250,000 loan the same move costs around $135 a month. That’s the approximate cumulative effect of 2026’s rises for a borrower whose lender has passed each one on in full.
The most recent repricing round is days old: CommBank lifted most business lending reference rates by 0.25 percentage points effective 9 October 2026, following the RBA’s September rise — and the RBA meets again on 3 November. If you haven’t reviewed your business loan since rates started rising, you’re now carrying four increases you’ve never tested against the market.
There’s a second-order effect too: higher repayments tighten cash flow, and tighter cash flow is itself something lenders price. Businesses that act early — restructuring debt, consolidating expensive short-term facilities, or extending terms while their financials still look strong — consistently get better outcomes than businesses that wait until the pressure shows in their bank statements.
Client Example
Picture a North Geelong engineering business carrying three facilities collected over the years: an unsecured loan taken in a hurry during a 2024 cash crunch (now sitting in the high teens), an equipment loan over a CNC machine, and an overdraft that’s permanently half-drawn. Each 2026 rate rise has nudged the variable facilities upward. The owners own their factory unit with usable equity in it. Restructured — the expensive unsecured debt consolidated against the property, the overdraft resized to what’s actually used, the equipment loan left alone because its fixed rate is now better than anything new — the blended rate across their borrowings drops materially and the monthly commitment frees up cash for a looming BAS quarter. The scenario is illustrative and the numbers depend entirely on the business, but the pattern — expensive crisis-era debt never revisited — is one we see every week.
Seven Ways to Pay Less Interest on a Business Loan
1. Offer security if you can. The secured-versus-unsecured gap of roughly 4–6 percentage points is the biggest single saving available in business lending. Property is strongest, but new equipment and vehicles also unlock sharper asset-finance pricing — and with the $20,000 instant asset write-off now permanent, the tax and finance decisions on new assets are worth making together.
2. Fix your lodgements before you apply. Up-to-date ATO lodgements and a clean payment history are now standard checks. An application that goes in tidy prices better than the same business explained apologetically.
3. Match the product to the purpose. Funding a long-term asset with a short-term unsecured loan, or covering a seasonal dip with a five-year term loan, both cost you. Overdrafts for fluctuation, term loans for investment, asset finance for assets.
4. Consolidate crisis-era debt. Loans taken quickly — especially 2023–2025 fintech facilities — are often the most expensive thing on the balance sheet. If your position has improved since, you may no longer need to pay for the version of your business that borrowed back then.
5. Make lenders compete. Pricing for the same business can differ by several percentage points between lenders, because each lender’s appetite for your industry, security and size is different. One application strategy, multiple quotes.
6. Revisit the structure annually. A rate that was sharp in 2024 may be mediocre after four rises and two repricing rounds. Lenders rarely ring to offer their back book a discount.
7. Watch the fees, not just the rate. Application fees, line fees on overdrafts, early-exit costs and valuation fees can move the true cost of credit more than a quarter-point of rate. Compare total cost over the life of the facility.
Pro Tip
Before refinancing anything, check whether your existing fixed-rate facilities are now below market — after four rises, a business loan fixed in 2025 might be the cheapest money you’ll see for a while. The right move is often selective: refinance the expensive variable and unsecured debt, leave the well-priced fixed debt alone, and never break a good fixed rate just to tidy the paperwork.
Frequently Asked Questions
What is a good business loan interest rate in Australia right now?
It depends almost entirely on security. In early October 2026, a property-secured business loan in the 7s or low 8s is competitive; for unsecured lending, anything close to the advertised floor of around 11% is strong, and mid-teens is common for typical SME files. Compare against the right category — an unsecured rate will never beat a secured one, and judging one against the other just causes grief.
Why do small businesses pay higher interest rates than big businesses?
Lenders price risk, and smaller businesses are statistically riskier: more variable income, less security, shorter track records. RBA lending data reported in 2026 puts the gap at roughly 1.5–1.7 percentage points on new loans. You can’t change the category, but you can change your position within it — security, clean financials, up-to-date lodgements and the right lender for your industry all move you down the curve.
Is a fixed or variable rate better for a business loan in 2026?
With the cash rate at a 15-year high and forecasters split on whether it rises again on 3 November, there’s no free answer. Fixing buys repayment certainty — valuable if your margins couldn’t absorb another rise — but lenders have already priced expected moves into fixed rates, and breaking a fixed business loan early can be costly. Many businesses split: fix the core term debt, keep working-capital facilities variable. The right mix depends on your cash flow, not on predicting the RBA.
Can I refinance my business loan to get a lower interest rate?
Yes — business loans can be refinanced or repriced like home loans, and after four rate rises it’s often the highest-value financial review a business can do. The strongest candidates are unsecured or fintech loans taken when the business was weaker, facilities priced before your financials improved, and multiple small debts that could consolidate against property or assets. Check exit fees and any fixed-rate break costs first, and weigh the total cost of switching, not just the new rate.
Paying Four Rate Rises More Than You Should?
We’ll review every business facility you hold — term loans, overdrafts, equipment finance, unsecured debt — against live pricing across our lender panel, and show you what a restructure would actually save before the RBA meets again. Based in Torquay, working with business owners across Geelong, Melbourne and Australia-wide by phone and video. No cost, no obligation.
Melanie McNaughton
Director & Senior Finance BrokerWith years of experience in mortgage broking and finance, Melanie helps first home buyers, refinancers, investors and business owners across Geelong, the Bellarine, the Surf Coast, Melbourne and regional Victoria make their money work harder. Contact our team on 03 9020 2699.