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Australian small businesses paid an average 7.23% a year on new loans in August 2026. Large businesses paid 5.54%, a gap of 1.69 percentage points. In a fee-free illustration with equal monthly repayments on $100,000 over three years, that difference adds $2,766 to interest.
The figures describe the loans reported to the RBA, not offers available to every borrower. Differences in collateral, loan size, product and borrower mix help explain the gap. It is not a measure of profit retained by lenders or a penalty charged solely because a business is small.
Average business lending rates, August 2026
| Business size | Outstanding loans (% p.a.) | New loans (% p.a.) |
|---|---|---|
| Small | 7.47 | 7.23 |
| Medium | 6.21 | 6.18 |
| Large | 5.75 | 5.54 |
Source: RBA Lenders’ Interest Rates, Table F 7, retrieved 10 October 2026. The published monthly observation includes fixed and variable-rate loans. The cash rate is a separate policy rate and should not be substituted for a business loan rate.
| Measure | % |
|---|---|
| Small businesses | 7.23 |
| Medium businesses | 6.18 |
| Large businesses | 5.54 |
What the size premium means in dollars
The following calculations hold principal, timing and interest method constant. They assume a fixed annual rate divided by 12, monthly payments in arrears, no fees, no missed payments and no balloon. The unrounded monthly payment is used to calculate total interest. Displayed cents may create a small difference if multiplied.
| Amount | Term | Annual rate | Monthly repayment | Total interest |
|---|---|---|---|---|
| $100,000 | 36 months | 7.23% p.a. | $3,098.24 | $11,536.51 |
| $100,000 | 36 months | 5.54% p.a. | $3,021.39 | $8,770.21 |
| $100,000 | 60 months | 7.23% p.a. | $1,990.99 | $19,459.36 |
| $100,000 | 60 months | 9.23% p.a. | $2,087.02 | $25,220.96 |
These are SMBLoan calculations, not RBA repayment estimates or lender quotes. A secured bank offer and an unsecured short-term product may have different eligibility, fees and payment schedules. Their headline rates alone cannot establish which is cheaper or available to the same business.
New lending and outstanding lending answer different questions
The 7.23% new-loan average describes recently written lending. The 7.47% outstanding-loan average covers the existing loan book, including older agreements. A change in either series can reflect a change in the borrowers or products in the pool as well as repricing. Subtracting one from the other is not a refinancing saving available to every borrower.
For an existing loan, request a payout figure and compare the remaining payments with the proposed replacement. Include exit fees, establishment costs and any longer term. Our refinancing guide explains that comparison.
A benchmark cannot identify the best loan
A business with property security, stable accounts and a long trading history may receive different offers from a young business seeking funding without specific asset security. A lender also needs to account for how much is borrowed and when it will be repaid. Those differences are hidden inside an average.
Compare written offers at the same amount and term. Record the money received after upfront deductions, all scheduled payments, mandatory fees, guarantees, security and early repayment rules. If the product uses a factor or fixed dollar charge, convert the schedule to a comparable cost basis rather than treating that factor as an annual rate.
For weekly or daily repayments, compare the payment dates with cash collection. A lower nominal rate can still create pressure if repayments begin before the financed stock or invoice produces cash. Our business loan interest-rate guide covers product pricing and fee comparisons.
How much room remains if rates rise?
The final row in the example tests a rate two percentage points above the August small-business average. This is a sensitivity test, not a rate forecast. A variable-rate borrower can use the same method with the quoted rate and then place the higher payment in a slower-sales cash forecast. A fixed-rate borrower should ask about break costs and the rate available when the fixed period ends.
Earlier observations and revision policy
Download the original July 2026 edition, which used May 2026 observations and a selected annual series. It remains a dated historical extract. It is not relabelled as an August observation. The new CSV records the three business-size averages retrieved for this edition; no missing intervening monthly values have been invented.
The earlier headline was 7.26% for new small-business loans in May 2026. The difference from August is −0.03 percentage points, but the composition of lending can change between months. This comparison alone does not establish that any particular lender reduced its price.
This is a manually maintained study. It does not promise an automatic refresh or a future publication date. The RBA source page carries subsequent observations; the observation month above remains visible until this report is checked again.
Method and limitations
We transcribed the small, medium and large business rows from the RBA’s public lending-rate table on 10 October 2026. Figures are annual percentages. The study does not measure rejection rates, unsecured-only pricing, the cost of merchant cash advances, or the market share of individual lenders. Repayment illustrations use the standard amortising-loan formula and exclude fees and tax effects.
Sources, citation and reuse
Data period: August 2026. Published averages do not establish individual eligibility or availability.
Download the data and source notes (CSV). Original downloads used by earlier editions have been retained where available. Keep each file’s observation period with any citation.
Cite: SMBLoan, “Small Business Loan Rate Reality Index”, revised 10 October 2026, /research/small-business-loan-rate-reality-index. For source questions or a correction, contact hello@smbloan.com.au.
Original SMBLoan charts may be reproduced with attribution and a link. Government and other third-party data remain subject to the original source’s terms; this page does not grant rights over third-party material. Please keep the observation period and methodological limits with any excerpt.