Rates, Costs and 2026 Rules
What sets a small business loan rate in Australia, how the main loan types compare, and the rules that apply in 2026.
small business loan rates Australia
Small business loan rates in Australia, worked out before you sign
The advertised rate is only one part of what a business loan costs. These guides show how Australian lenders price business credit, which protections apply (and which do not), and how to compare offers on total cost.
- Compare secured, unsecured, overdraft, invoice and equipment finance on total cost, not headline rate
- Use the repayment, refinance and net-proceeds calculators with your own figures
- Check the rules and complaint paths: Banking Code, ASIC, AFCA, ASBFEO and state small business commissioners
Explore by topic
Worked Examples and Checklists
Repayment, borrowing capacity, quote comparison and refinancing examples with the arithmetic shown, plus application checklists.
Mistakes, Disputes and Official Sources
Where small business borrowers get caught out, what security and guarantees really mean, and where to complain or get free help.
Start here
Worked Examples and Checklists
Business loan application checklist for Australia: documents, numbers and questions
What Australian lenders ask for in a small business loan application, how full-doc and low-doc applications differ, and how to prepare so you are assessed on the business.
Mistakes, Disputes and Official Sources
Business loan mistakes to avoid: ten patterns that cost Australian small businesses
The most common and costly small business loan mistakes in Australia, from unadvised guarantees and broad GSAs to short-term debt spirals, with what to do instead.
Worked Examples and Checklists
Comparing three business loan offers: a worked example on total cost
A step-by-step comparison of three illustrative Australian small business loan offers, adjusting for deducted fees, monthly fees and repayment terms to find the real cost.
Worked Examples and Checklists
Factor rate to interest rate: what a short-term business loan really costs
How to convert a factor rate on an Australian short-term business loan or merchant cash advance into an effective annual rate, with worked examples and red flags.
Mistakes, Disputes and Official Sources
Personal and director guarantees on business loans in Australia: what you are really signing
How personal and director guarantees work on Australian business loans, all-monies vs limited guarantees, Banking Code protections, key cases and how to reduce your exposure.
Rates, Costs and 2026 Rules
Small business loan rates in Australia: what sets the price and how to compare offers
How Australian lenders price small business loans in 2026, from the RBA cash rate to margins, security, fees and term, with worked cost examples.
Tools
Business loan repayment calculator
Monthly repayment, total interest and total cost of a business term loan, including upfront fees.
Business loan refinance calculator
Compare your current business loan with a new offer, including break costs and switching fees.
Net loan proceeds calculator
How much cash actually reaches your account after a percentage establishment fee and fixed fees are deducted.
Business loan application checklist
Documents, numbers and questions to have ready before you apply for a small business loan in Australia.
Small business finance types compared
| Finance type | How it works | Usually suits | Watch out for |
|---|---|---|---|
| Secured term loan (property) | Lump sum repaid over a set term, secured by a registered mortgage over commercial or residential property | Larger amounts, buying a business or premises, long-term needs | Your home may be at risk if it is the security; valuation and legal costs; break costs on fixed rates |
| Secured term loan (business assets / GSA) | Lump sum secured by a general security agreement over business assets registered on the PPSR | Established businesses without property to offer | GSA may cover all present and after-acquired property; usually also a director guarantee |
| Unsecured business loan | Shorter-term loan with no specific asset as security, often with a personal guarantee | Smaller, fast working capital needs | Higher rates, percentage establishment fees, daily or weekly repayments, guarantee still exposes directors |
| Business overdraft | Limit on a transaction account; interest charged on the drawn balance, plus a fee on the limit | Smoothing cash flow timing gaps | Line or limit fees whether used or not; lender can review the limit; not for long-term assets |
Frequently asked questions
What interest rate should a small business expect on a loan in Australia?
It depends on security, trading history, industry, loan size and term. Loans secured by property are usually priced well below unsecured loans, which can carry much higher rates and fees. The Reserve Bank's cash rate (4.60% from 30 September 2026, per the RBA) sets the base for funding costs, and lenders add a margin. Compare total cost in dollars, not just the headline rate.
Do responsible lending laws apply to business loans?
Generally not. The National Consumer Credit Protection Act 2009 and the National Credit Code apply to credit mainly for personal, domestic or household purposes or residential investment property. Business loans are covered by the ASIC Act's general protections against misleading and unconscionable conduct and unfair contract terms, and by industry codes such as the Banking Code of Practice for subscribing banks.
Is there a comparison rate for business loans?
The comparison rate requirement comes from the National Credit Code, so it usually does not apply to business loans. Some lenders still show one. Calculate the total cost yourself: interest over the term plus all fees, and compare offers for the same amount and term.
Can I get a business loan without property security?
Yes. Unsecured loans, invoice finance, equipment finance secured over the asset and some lines of credit do not need property. Expect higher pricing, shorter terms, and usually a personal guarantee from directors.
How much can my business borrow?
Lenders look at how many times your cash flow covers the repayments (debt service cover), the security offered and your existing debts. A common approach is to compare EBITDA with total annual debt repayments. See the borrowing capacity worked example for the arithmetic.
Is business loan interest tax deductible?
Interest on money borrowed to earn assessable business income is generally deductible, but the rules depend on the purpose of the borrowing and your business structure. Check with the ATO or a registered tax agent, especially if the loan is mixed business and private.
Where can I complain about a business lender?
First use the lender's internal dispute resolution process. If it is not resolved, small businesses can usually take a complaint to the Australian Financial Complaints Authority, subject to its eligibility limits. The Australian Small Business and Family Enterprise Ombudsman and state small business commissioners can also help.
How this site is made
Business Loan Workings is an independent information project. Guides are drafted with the help of AI writing tools and checked against official and primary sources before publication; see our Editorial Policy. We are not affiliated with any provider mentioned on the site and do not sell products or services.