Small Business Loan Interest Rates Australia 2026 - Current Rates Compared

Business loan interest rates in Australia in 2026 range from 6% p.a. for secured bank facilities to 25% p.a. for unsecured non-bank products. The rate you pay depends on your security, lender type, credit profile, and trading history.

Current business loan rates (bank rows checked 20 October 2026)

Why non-bank rates are higher

Non-bank lenders charge higher interest rates because they take on more risk. They don't require property security, accept shorter trading histories, and approve businesses that banks decline. The premium you pay is for speed, accessibility, and flexibility - not because the product is inferior.

A bank might offer 8% but require 6 weeks, full financials, and your house as security. A non-bank offers 18% but approves in hours, needs only bank statements, and doesn't touch your property. For short-term cash flow needs, the non-bank is often the better deal when you factor in the time value of money and the cost of missing opportunities. For a product-by-product view of working capital loan rates, see the lender-type table on the working capital page.

What affects your rate?

• Security. Secured facilities (property-backed) are 50-70% cheaper than unsecured.
• Credit score. Higher score = lower rate. 550 gets you approved, 700+ gets you the best pricing.
• Trading history. 6 months gets you in the door, 2+ years gets better rates.
• Revenue. Higher revenue = lower risk = better pricing.
• Industry. Some industries are viewed as lower risk and attract better rates.
• Facility size. Larger facilities sometimes attract better pricing due to economies of scale.

Is the interest tax deductible?

Yes. All business loan interest is tax deductible if the funds are used for business purposes. At the 25% base rate entity tax rate, an 18% interest rate effectively costs 13.5% after tax. Read our full tax deductions guide.

How to get the lowest rate

1. Use a broker. OverdraftMe compares 50+ lenders simultaneously and finds the lowest rate for your profile.
2. Provide the strongest application. Clean bank statements, good credit score, stable revenue.
3. Consider security. If you own property and want the lowest rate, a secured facility will always be cheaper.
4. Don't apply to multiple lenders. Each application creates a credit enquiry that can reduce your score and increase your rate.

Related

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• How much does a $100K overdraft cost?
• Compare business overdrafts
• Are business loan costs tax deductible?
• Credit card vs overdraft cost comparison

Related: See the full 2026 Business Loan Factsheet for eligibility, worked examples and what documents you need.