Quick answer: there is no single business loan interest rate in Australia. The Reserve Bank publishes average lending rates by business size — for July 2026 the average rate on outstanding small business loans was 7.46% per annum, medium business 6.21% and large business 5.74% — but those are aggregates across every lender and every kind of business lending, not a quote. What an individual business is offered depends on the lender, the product, whether the loan is secured, the credit profile of the business and its directors, how long the business has been trading, and the amount and term. This page explains what the official data actually measures, why your number will differ from it, and what to look at instead of the headline rate.
What the RBA publishes, and what it measures
The Reserve Bank publishes Lenders’ Interest Rates five business days after the end of each month, drawing on APRA data. The business series (Statistical Table F7) is broken down by business size and by whether the loan is outstanding (the average across loans already on lenders’ books) or new (the average on loans written in that month). For July 2026:
| Loan purpose | Outstanding loans (% per annum) | New loans (% per annum) |
|---|---|---|
| Small business | 7.46 | 7.44 |
| Medium business | 6.21 | 6.26 |
| Large business | 5.74 | 5.54 |
Source: RBA, Lenders’ Interest Rates, July 2026 (Table F7 — Business Lending Rates; sources APRA and RBA). The series includes loans at both variable and fixed interest rates.
Two things follow from how that table is built, and both matter if you are trying to use it as a benchmark.
It is an average across everything. The small business figure blends secured and unsecured lending, term loans and overdrafts, bank and non-bank pricing, strong files and marginal ones. The RBA does not publish a breakdown by product type on this page, so nobody can honestly tell you “the average overdraft rate” or “the average unsecured business loan rate” from this data. Anyone presenting one has got it from somewhere else.
Smaller businesses pay more. The gap between the small business and large business averages was about 1.7 percentage points on outstanding loans in July 2026. That is the risk and cost-to-serve difference showing up in the price, and it is the single most useful thing in the table for a trade business: your benchmark is the small business line, not the headline “business lending” number people sometimes quote.
Why your rate will not be the average
An average is the midpoint of a wide distribution. Lenders price each file, and the same business can be quoted materially different rates by different lenders in the same week. The variables that do the work:
- The lender. Major banks, second-tier banks, and non-bank and specialist commercial lenders occupy different parts of the market and price differently for the same file.
- The product. A loan secured by an identifiable asset is priced differently from a revolving facility, which is priced differently again from an unsecured cash-flow loan. This is where most of the variation lives.
- Security. Whether the lender can take security, and over what. Security over a vehicle or a piece of equipment is straightforward; security over a director’s property is a different conversation with different pricing and different consequences.
- Credit profile. The business’s credit file and the directors’ personal files, including defaults, judgments and the pattern of recent enquiries.
- Business history. Time trading, ATO position, and whether financials or a low-doc alternative are being used to evidence income.
- Amount and term. Small, short facilities often carry higher rates and proportionally higher fees; longer terms shift the total cost even at the same rate.
None of that turns the RBA average into a quote, and it should not be used as one. The table tells you what the market paid on average; it does not tell you what any lender will offer your business.
The rate is not the whole cost
Two facilities at the same headline rate can cost very different amounts. Before comparing rates, get the following on the table for each option:
- Establishment and documentation fees, and whether they are capitalised into the loan.
- Ongoing account or line fees, particularly on revolving facilities where a fee may apply to the limit whether or not it is drawn.
- Whether the rate is fixed or variable, and what happens to repayments if it moves.
- Early repayment or break costs — significant on fixed-rate commercial facilities.
- The repayment structure, including whether a balloon or residual is involved and what is owed at the end.
- What is actually being secured, and what happens on default.
Note that the consumer comparison-rate rules do not apply the same way to commercial lending, so you often cannot reduce two commercial offers to a single comparable figure. The practical substitute is total cost over the full term, including fees and any residual — which is what the business loan calculator is for. Put the same amount and term into each scenario and compare the totals, not the monthly repayment.
Where the cash rate fits
The RBA’s cash rate target has been 4.35% since 12 August 2026, when the Monetary Policy Board left it unchanged after increases in February, March and May 2026. The cash rate influences lenders’ funding costs and therefore the general direction of business lending rates, but it is not a floor and it is not passed through one-for-one. The margin between the cash rate and the average small business rate reflects credit risk, capital and operating costs, and it moves for its own reasons. Fixed-rate commercial pricing is driven more by swap rates over the relevant term than by the current cash rate.
What actually moves your rate down
In our experience the levers that change pricing on a trade-business file are not exotic:
- Offer security where you sensibly can. A secured facility against a truck, ute or piece of plant is normally priced better than unsecured cash-flow lending. If the purpose is an asset purchase, ask whether it should be asset finance rather than a general business loan at all — the structure changes the price.
- Match the facility to the purpose. Funding a machine on a revolving facility, or funding a seasonal cash-flow gap with a five-year term loan, both cost more than the right structure would. The options are compared at business loans and finance.
- Clean up the credit file first where there is something on it. Paid defaults are treated more favourably than outstanding ones, and a run of recent declined applications makes the next file look worse. This matters most on impaired files — see bad credit business loans.
- Have the documents ready. A file that arrives complete is assessed on its merits rather than on assumptions. What lenders ask for is set out in business loan requirements.
- Have the application matched to the right lender before it is lodged. Rate differences between lenders on the same file are routinely larger than anything you will negotiate with one lender.
Rates for asset and equipment purchases behave differently again, because the asset itself is the security — those are covered separately in equipment finance rates and costs.
Apply now — or send us the file and we will tell you which lenders are realistic before anything is lodged.
Business loan interest rate FAQs
What is the average business loan interest rate in Australia?
The RBA published average rates for July 2026 of 7.46% per annum on outstanding small business loans, 6.21% for medium business and 5.74% for large business, based on APRA data. These are averages across all lenders and all types of business lending, including both variable and fixed rate loans, and are not a quote for any individual business.
Why do small businesses pay more than large businesses?
The RBA data shows a gap of roughly 1.7 percentage points between average outstanding small and large business rates in July 2026. Smaller facilities generally carry higher assessed credit risk and higher cost to serve relative to the amount lent, and that shows up in the price.
Does the RBA publish rates by loan type?
Not on its Lenders’ Interest Rates page. The published business breakdown is by business size and by whether the loan is outstanding or newly written. There is no official average for overdrafts, unsecured loans or lines of credit in that series.
Is a secured business loan cheaper?
Generally the rate is lower where a lender holds security it can realise, because its exposure is lower. The trade-off is what happens on default, and what asset is at risk.
Do business loans have a comparison rate?
The consumer comparison-rate rules do not apply to commercial lending the same way, so you often cannot reduce two commercial offers to one figure. Compare total cost over the full term including fees and any residual instead.
Is the cash rate the same as a business loan rate?
No. The cash rate target is 4.35% as at 12 August 2026 and influences lenders’ funding costs, but business lending rates sit above it by a margin that reflects credit risk, capital and operating costs, and that margin moves independently.
Will my rate change during the loan?
Only if it is a variable rate facility. Fixed rate commercial loans hold the rate for the fixed period, usually with break costs if you repay early. Which suits depends on how predictable you need the repayment to be.
Written and reviewed by the Finance Director at Tradie Finance.
This article is general information only and does not constitute credit or financial advice. Rates published by the Reserve Bank of Australia are aggregate statistics for July 2026 across all lenders and all business lending, sourced from APRA and the RBA, and are not an offer, a quote or an indication of the rate available to any particular business. Rates change. Tradie Finance operates under Australian Credit Licence 506065 (Five Tees Pty Ltd). Lending is subject to approval, lending criteria, terms, conditions and fees.