Have the 2019 RBA interest rate cuts flowed on to business loans?

By Tom Watson · · 3 min read
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Now that the dust has settled after the latest Reserve Bank cash rate cut, a clearer picture has emerged of the impact the June, July and October cuts have had on business loans issued by Australian banks. 

For Aussie businesses looking for additional financing that picture is a pretty one, because all of the major and challenger banks being tracked in the Mozo database have reduced their rates since June 2019. 

In fact, with the exception of a handful of lenders, almost every bank has passed on a portion of each of the three 0.25% RBA cuts so far this year. 

“Though the reaction has typically been slower in reducing business loan rates than rates for deposit accounts or home loans, there has been a noticeable downward trend since the Reserve Bank started cutting rates earlier this year,” said Mozo Banking Expert, Peter Marshall. 

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So just how far have business loan rates fallen and where are they sitting now? 

Well according to our figures, the average residentially secured, variable rate business loan in the Mozo database has dropped from 5.52% to 5.12% in the five months since June - a 0.40% reduction. 

To put that cut into perspective, the Reserve Bank reduced the official cash rate by 0.75% over that same period.

Further narrowing in on the figures reveals that the big banks are still charging a premium on their business loans compared to challenger lenders though, with the average rate among the Big Four currently^ at 5.46%. 

Though as you can see in the table below, there is also a marked difference between the different rates on offer from ANZ, CommBank, NAB and Westpac.

According to the latest figures, challenger banks and big bank subsidiaries generally continue to provide more competitive rates for their business customers.

The latest average rate for a residentially secured, variable rate business loan among these players currently sits at 4.90% - a 0.31% drop since June. 

At present the lowest rates on offer among this cohort are Suncorp’s Business Essentials Loan at 4.19% and IMB Bank’s Fully Drawn Business Loan at 4.24%. Here’s a more comprehensive list though:

According to Marshall, it’s not just as simple as business just looking at the interest rate alone though. 

“It’s encouraging to see that bank lenders have been reducing their business loan rates, but businesses should bear in mind that these advertised rates are simply a jumping off point,” he said. 

“Businesses are often assessed individually based on a number of factors including their capacity to pay back the loan and whether or not they conduct any other business with the bank, which means the rate offered may be different to the advertised rate.”

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Ready to compare business loans for yourself? Take a look at some of the great offers in the table below, or head over to the Mozo business loans comparison hub to compare 40 different business loans bank and non-bank lenders. 

^Rates correct as of November 15, 2019.

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Last updated 19 April 2025Important disclosures

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