Business loan interest rates in Australia vary far more than most owners expect. The same business can be offered 8% p.a. by one lender and 20% p.a. by another, depending on security, trading history and the type of loan. This guide explains the typical ranges in 2026, what moves them, and how to compare offers on what they will actually cost you.
Quick answer
As a guide, comparison data published in mid-2026 put secured business loans at roughly 7% to 10% p.a. and unsecured business loans at roughly 10% to 18% p.a., with short-term, low doc and bad credit lending often higher again. Those figures predate the Reserve Bank lifting the cash rate to 4.60% in September 2026, so variable rates may now sit slightly higher. The rate you are offered depends on your security, time trading, revenue, credit file and the type of loan.
How the cash rate affects business loan rates
The Reserve Bank cash rate is the starting point for what lenders pay for their own funds. It began 2026 at 3.60% and has risen four times, to 4.60% from 30 September, its highest level since 2011. Banks usually pass cash rate changes through to variable business loan rates fairly quickly. Non-bank lenders, which provide many unsecured and short-term loans, price mainly on the risk of each application, so their rates move less directly with the cash rate.
If your loan has a fixed rate, the rate you agree stays the same for the term, whatever the Reserve Bank does next. A variable rate moves with the market, up or down.
Typical business loan rates by loan type
| Loan type | Indicative rate | What drives it |
|---|---|---|
| Secured business loan | About 7% to 10% p.a. | Property or asset security, established trading and strong financials |
| Unsecured business loan | About 10% to 18% p.a. | Revenue, time trading, credit history and existing debts |
| Short-term and fast business loans | Often 15% p.a. or more on an equivalent basis | Speed, short terms and lighter documentation, often quoted as a factor rate |
| Business line of credit | Usually similar to unsecured loans, plus a line fee | You pay interest only on what you draw, but check the fee to keep the limit open |
| Low doc and bad credit loans | Usually the upper end of unsecured ranges or above | Limited documents or past credit problems mean more risk for the lender |
Treat these as indicative only. Lenders price every application individually, and advertised from rates go to the strongest applicants. Always ask for the rate and the total amount repayable on your own application.
What a different rate means in dollars
Rates are easier to judge in dollars. On a $50,000 loan over 12 months with monthly repayments, our business loan calculator shows:
| Interest rate | Monthly repayment | Total interest |
|---|---|---|
| 9% p.a. | $4,373 | $2,471 |
| 16% p.a. | $4,537 | $4,439 |
| 30% p.a. | $4,874 | $8,492 |
The monthly repayment changes by about $500 between the lowest and highest rate, but the total interest more than triples. That is why the total cost of a loan matters more than the repayment alone, and far more than the headline rate.
Find out what you could qualify for
Advertised rates go to the strongest applicants. A quick eligibility check shows which lenders you are likely to qualify with, using a soft check rather than a hard credit enquiry.
Check your eligibilityInterest rates, factor rates and comparison rates
Many short-term lenders quote a factor rate, such as 1.15, instead of an annual interest rate. A factor rate is charged on the full amount borrowed from day one, so a 1.15 factor rate on a six-month loan costs far more than 15% p.a. Our guide to factor rates versus interest rates shows how to convert one into the other so you can compare like with like.
Some lenders also quote a comparison rate, which builds standard fees into a single figure. Comparison rates are required when advertising consumer loans but generally not for business loans, so you may need to ask each lender for its full fee schedule.
Fees that change the real cost
Two loans with the same rate can cost very different amounts once fees are added. Look for:
- Establishment or application fees, charged upfront or added to the loan
- Monthly account or facility fees
- Line fees on a line of credit, payable whether or not you draw on it
- Early repayment fees. With some short-term loans, the full cost is payable even if you repay early
- Dishonour and late payment fees if a repayment is missed
The simplest test is to ask every lender for the total amount repayable, including all fees, and compare that number.
What lenders look at when setting your rate
- Security: property or other assets lower the lender’s risk and usually the rate. Our guide to secured and unsecured business loans covers the trade-offs.
- Time trading: businesses with two or more years of history are usually offered better pricing than newer ones.
- Revenue and consistency: steady turnover on your bank statements supports a lower rate.
- Credit history: defaults or a run of recent enquiries push pricing up. See our guide to your business credit score.
- Existing debts and tax position: current repayments and any overdue ATO debt affect how much risk a lender sees.
- Loan term and amount: shorter, smaller unsecured loans often carry higher rates, although the total interest can still be lower.
For the full picture, read what lenders look for in a business loan application.
How to get a lower business loan rate
- Offer security if you can. Secured loans are usually priced well below unsecured loans.
- Apply when your recent bank statements are strong, not straight after a run of overdrawn days or dishonours.
- Check your credit file and correct any errors before you apply.
- Bring BAS and tax lodgements up to date, and set up an ATO payment plan for any balance you cannot clear.
- Choose the shortest term you can comfortably repay, as it usually keeps total interest lowest.
- Compare at least two offers on total cost, including fees.
- Apply once, rather than with several lenders at the same time, to avoid a cluster of credit enquiries.
Common questions
What is the average interest rate on a business loan in Australia?
There is no single average, because pricing depends so heavily on security and risk. As a broad guide from 2026 market data, secured business loans have sat around 7% to 10% p.a. and unsecured loans around 10% to 18% p.a., with short-term and higher-risk lending above that.
Are business loan rates fixed or variable?
Both exist. Bank business loans are often variable, while many non-bank unsecured and short-term loans have a fixed rate or a fixed total cost for the term. Fixed pricing makes repayments predictable, while a variable rate can fall as well as rise.
Will the latest rate rise affect my existing business loan?
Only if your loan is variable. Fixed-rate loans and fixed-cost short-term loans keep the price agreed at the start of the loan.
Do new businesses pay higher rates?
Usually, yes. A lender has less history to assess, so businesses trading for less than a year or two tend to see higher rates and lower limits. Our borrowing power calculator shows how time trading affects how much you could borrow.
Is business loan interest tax deductible?
Interest on money borrowed for business purposes is generally deductible, but how it applies depends on your business structure and how the funds are used. Check with your accountant before relying on it.
Ezy Pzy Finance is an introducer, not a lender. Once you know what you can afford, a quick eligibility check lets us match you with lenders whose criteria you are likely to meet, using a soft check rather than a hard credit enquiry upfront.