The Latest Business Loan Rates in Australia

Date Posted: June 3, 2020

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If you’re looking to expand your business or just get it off the ground, a business loan can really help. We go over the latest business loan rates in Australia as of June 2020 in this article.

There are different types of business loans available – overdrafts or lines of credit, secured, lease financing and asset purchasing to name a few.

Here’s how they compare to each other:

Loan Type Interest Rate Monthly Fee Min Lend
Secured Business Loan From – 2.85% pa From $0 $5000
Unsecured Business Loan From – 2.00% pm From $0 $5000
Line of Credit From – 2.74% pa From $0 $5000
Sale and Buyback From – 3.85% pa From $0 $10000

 

Tip: when looking at the latest business loan rates in Australia and comparing figures, don’t fall into the trap of interest rate tunnel vision. Remember, the interest rate is just that – the interest you’ll pay on what you borrow. It doesn’t include fees and charges.

The comparison rate is the one to look at for a more accurate picture. You’ll likely see the comparison rate listed next to the interest rate. This includes all fees and charges and gives a closer idea of what you’ll be paying to borrow money. Of course, with business loan rates (and all loans), this always makes the comparison rates higher than the interest rate.

Make sure you look at all fees and charges and understand what they mean and how much you’ll be paying. Your lender or broker is responsible for making this ultra clear before you sign your life away.

Business loans during 2020

It’s been an extremely rocky and treacherous road for Australian businesses in 2020. First, the blow from the bushfire disaster and now the immense coronavirus damage.

Fortunately, the Federal Government is making a huge effort to counter the hit. Temporary assistance measure include:

  • Cash flow assistance
  • Wage subsidy for to help retain employees
  • A safety net for companies facing financial distress
  • Credit loans for working capital
  • JobKeeper 
  • Other measures

Government-backed business loans

The latest business loan rates in Australia are affected by the Federal Government’s Coronavirus SME Guarantee Scheme. These are loans of up to $250,000 for eligible Australian SMEs.

What rates are on offer?

The great news is the loans are unsecured with terms of up to three years. Additionally,  borrowers are only charged interest on used funds they draw on – no interest is applicable for unused funds. Secondly, loans under this scheme have no fees attached. If your business is eligible, your principal and interest repayments can be delayed on all term and retail loans for up to a 6-month period. It gets better – at the end of the 6 months, you don’t have to pay a huge lump sum for the deferred interest, businesses can simply extend their loan term.

How about the lenders?

On the lender’s side, banks and financial institutions can tailor terms to suit small businesses who experience financial hardship. This means more options are now available to accommodate those feeling the pinch or just in need of a tune up.

Reasons for getting a business loan

Interest rates aside, there are a lot of reasons for actually getting a loan. Here are a few to consider:

  • Paying Wages
  • Hiring New Staff
  • Purchasing Stock
  • Equipment
  • Funding Growth

Despite the current economic climate at home and abroad, now may be the time to grab the bull by the horns and prepare your business for the future. As experts say, avoiding stagnation and falling behind competitors should always be high priorities for any business owner. 

 

calculate repayments

Calculate Repayments

With a loan calculator you can work out what your repayments may be, how they can change with interest rates and how much you can borrow based on a weekly, monthly payment. Be armed for when you speak to your lender!

compare loans

Compare Loans

When ready, you will be able to compare loans to help you decide which is better suited to your needs! Assess what terms and figures will better help your situation and be fully prepared when you speak to your broker.