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

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.
Compare business loans - rates updated daily
Line of Credit
Unsecured business funding up to $500K. Start the online application process in just 5 minutes, and get access to funds within 24 hours once approved. Great for ABN registered businesses with an annual turnover of $200K+.
Interest Rate
Upfront Fee
Funding speed
On Application2% to 3%Instantly, once approvedLine of Credit
Unsecured business funding up to $500K. Start the online application process in just 5 minutes, and get access to funds within 24 hours once approved. Great for ABN registered businesses with an annual turnover of $200K+.
- Interest Rate
- On Application
- Upfront Fee
- 2% to 3%
- Ongoing Fees
- $0.00
- Late payment fee
- -
- Transaction fee
- -
- Early repayment penalty
- 0
- Other fees
- Various late payment fees may apply.
- Loan type
- Line of Credit
- Security type
- Unsecured
- Minimum loan amount
- $10,000
- Maximum loan amount
- $500,000
- Minimum loan term
- 6 months
- Maximum loan term
- 5 years
- Repayment frequency
- Weekly, Fortnightly, Monthly
- Repayment types
- Principal & Interest
- Minimum trading period
- 18 months
- Minimum annual turnover
- $200,000
- Application speed
- 10 minutes
- Approval speed
- 24-48 hours
- Funding speed
- Instantly, once approved
- Extra repayments allowed
- Yes
- Redraw allowed
- Yes
- Other benefits
- -
- Other restrictions
- -
Short Term Business Loan
Unsecured business loans from $10,000 - $250,000, over 6 to 24 months. Online application takes only 10 minutes and you'll know if you're approved within hours. Apply now.
Interest Rate
Upfront Fee
Funding speed
On Application3.00%from 24 HoursShort Term Business Loan
Unsecured business loans from $10,000 - $250,000, over 6 to 24 months. Online application takes only 10 minutes and you'll know if you're approved within hours. Apply now.
- Interest Rate
- On Application
- Upfront Fee
- 3.00%
- Ongoing Fees
- $0.00
- Late payment fee
- $0.00
- Transaction fee
- $0.00
- Early repayment penalty
- $0.00
- Other fees
- -
- Loan type
- Loan
- Security type
- Unsecured
- Minimum loan amount
- $10,000
- Maximum loan amount
- $250,000
- Minimum loan term
- 6 months
- Maximum loan term
- 2 years
- Repayment frequency
- Daily, Weekly
- Repayment types
- Principal & Interest
- Minimum trading period
- 1 year
- Minimum annual turnover
- $100,000
- Application speed
- 10 Minutes
- Approval speed
- from 24 Hours
- Funding speed
- from 24 Hours
- Extra repayments allowed
- No
- Redraw allowed
- Eligible to apply for renewal after 50% paid down
- Other benefits
- -
- Other restrictions
- Minimum $100k turnover and 1 Year in Business.
Lumi Lux
Lumi Lux™ is an innovative rate-reducing business loan that rewards customers for a good repayment history over the loan term by dropping interest rates by 25 basis points every six months (T&Cs apply). The loan is for more established businesses with minimum $2M revenue.
Interest Rate
Upfront Fee
Funding speed
from 14% to 20%-VariesLumi Lux
Lumi Lux™ is an innovative rate-reducing business loan that rewards customers for a good repayment history over the loan term by dropping interest rates by 25 basis points every six months (T&Cs apply). The loan is for more established businesses with minimum $2M revenue.
- Interest Rate
- from 14% to 20%
- Upfront Fee
- -
- Ongoing Fees
- 3.5% establishment fee of the disbursed amount.
- Late payment fee
- -
- Transaction fee
- -
- Early repayment penalty
- -
- Other fees
- -
- Loan type
- Loan
- Security type
- -
- Minimum loan amount
- $200,000
- Maximum loan amount
- $500,000
- Minimum loan term
- 3 months
- Maximum loan term
- 4 years
- Repayment frequency
- -
- Repayment types
- -
- Minimum trading period
- 3 years
- Minimum annual turnover
- $2,000,000
- Application speed
- Varies
- Approval speed
- Varies
- Funding speed
- Varies
- Extra repayments allowed
- -
- Redraw allowed
- -
- Other benefits
- Loan interest rate decreases by 0.25% every 6 months with good behaviour up to a maximum 2% drop.
- Other restrictions
- -
Read our Mozo Review to learn more about the Lumi Lux
Invoice Finance
Set up a line of credit against your debtors ledger, which grows with your business. Access funds as soon as you invoice instead of waiting for your customers to pay. ScotPac is the largest non-bank lender in Australia with over 30 years' experience partnering with local businesses.
Interest Rate
Upfront Fee
Funding speed
from 4.00% p.a.On ApplicationFrom 24 hoursInvoice Finance
Set up a line of credit against your debtors ledger, which grows with your business. Access funds as soon as you invoice instead of waiting for your customers to pay. ScotPac is the largest non-bank lender in Australia with over 30 years' experience partnering with local businesses.
- Interest Rate
- from 4.00% p.a.
- Upfront Fee
- On Application
- Ongoing Fees
- -
- Late payment fee
- -
- Transaction fee
- $0.00
- Early repayment penalty
- -
- Other fees
- -
- Loan type
- Line of Credit
- Security type
- Secured
- Minimum loan amount
- $10,000
- Maximum loan amount
- -
- Minimum loan term
- -
- Maximum loan term
- -
- Repayment frequency
- -
- Repayment types
- -
- Minimum trading period
- 0 years
- Minimum annual turnover
- $0
- Application speed
- From 24 hours
- Approval speed
- From 24 hours
- Funding speed
- From 24 hours
- Extra repayments allowed
- -
- Redraw allowed
- -
- Other benefits
- Line of Credit against debtor ledger
- Other restrictions
- -
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While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.