Business loan interest rates in Australia: what small, medium and large businesses pay

The average interest rate on outstanding small-business loans was 7.46% in July 2026, compared with 6.21% for medium businesses and 5.74% for large businesses¹. New loans funded in July 2026 averaged 7.44% for small businesses, 6.26% for medium businesses and 5.54% for large businesses. The small-business average rate was the highest monthly value of the 85 months from July 2019 to July 2026.

The averages cover loans, finance leases and bill acceptances to businesses. They are weighted by value, so larger loans have more influence on the average¹. The RBA describes the rates as indicative only and subject to revision.

Three size classes apply. A business is small when the lender's exposure to it is less than $1 million and its turnover is less than $50 million. It is medium when the exposure is $1 million or more and turnover is less than $50 million, and large when turnover is $50 million or more¹. Since April 2023, banks that use their own APRA-approved credit risk models have classified businesses under the size definitions in prudential standards APS 112 and APS 113, while other lenders' definitions are unchanged.

The average rate on new small-business loans has been below the average rate on outstanding small-business loans in each of the 26 months from June 2024 to July 2026¹.

The average rate on outstanding small-business loans was 3.11 percentage points above the cash rate target in July 2026¹. The medium-business average rate was 1.86 points above the cash rate target, and the large-business average rate was 1.39 points above it. The cash rate target has been 4.35% since 6 May 2026³, and the RBA's Monetary Policy Board left it unchanged at its June⁴ and August 2026 meetings⁵.

The small-business margin over the cash rate was 4.40 percentage points in July 2019¹. It reached 4.76 points in March 2020, the widest monthly margin in the 85 months to July 2026, and fell to its narrowest level of 2.70 points in June 2023.

Between April 2022 and December 2023, the cash rate target rose 4.25 percentage points, from 0.10% to 4.35%, while the small-business average rate rose 3.02 points, from 4.11% to 7.13%¹. The medium-business average rate rose 3.61 points and the large-business average rate rose 4.15 points.

During 2025, the cash rate target fell 0.75 points, from 4.35% in December 2024 to 3.60% in December 2025. The small-business average rate fell 0.58 points, from 7.43% to 6.85%, and the large-business average rate fell 0.78 points, from 5.81% to 5.03%¹. Between December 2025 and July 2026, the cash rate target rose 0.75 points, from 3.60% to 4.35%. The small-business average rate rose 0.61 points, the medium-business average rate rose 0.73 points and the large-business average rate rose 0.71 points.

Small businesses paid 6.98% on outstanding loans secured by residential property in July 2026, 0.48 percentage points less than the 7.46% average rate for all outstanding small-business loans¹. On new loans, the residentially secured average rate was 6.89%, 0.55 points below the 7.44% average rate for all new small-business loans.

A residentially secured loan is one where the borrower offers a home or other residential property as collateral. The residentially secured average rate was below the all-loans average rate in every month from July 2019 to July 2026, with the difference ranging from 0.03 to 0.62 percentage points¹.

The RBA's October 2025 Bulletin reports that around half of small loans to SMEs were secured with assets other than residential property, such as vehicles and equipment. The unsecured share of SME credit remained below 5% in the years to October 2025². New loans secured with residential property were on average 4.5 times the size of loans not secured by residential property in the years to October 2025.

Outstanding owner-occupier housing loans averaged 6.2% in July 2026, about 1.3 percentage points below the 7.46% average rate on outstanding small-business loans⁶.

The average rate on outstanding small-business loans fell from 5.40% in July 2019 to 4.11% in April 2022, its lowest monthly level between July 2019 and July 2026¹. It rose to 7.43% in December 2024, fell to 6.85% in December 2025 and reached 7.46% in July 2026.

The medium-business average rate ranged from 2.59% in January and February 2022 to 6.29% in February and March 2024¹. The large-business average rate ranged from 1.50% in October, November and December 2021 to 5.87% in July 2024.

Between July 2019 and July 2026, the cash rate target rose 3.35 percentage points, from 1.00% to 4.35%. Over the same period, the small-business average rate rose 2.06 points, the medium-business average rate rose 2.28 points and the large-business average rate rose 2.94 points¹. The gap between the small-business and large-business average rates narrowed from 2.60 points to 1.72 points over the same time.