Business interest rates are outpacing rises in the official Reserve Bank of Australia overnight cash rate.
Business lending data from credit research service CANNEX shows that many overdraft facilities at the five major banks are charging interest rates of more than 10% a year.
Business lending rates naturally vary due to specific business risks across the SME sector; the loan size and security will also explain some difference.
The data shows the rates are rising far ahead of the RBA base rate of 7.25% a year.
The table below highlights interest rates on a typical overdraft or line of credit. Most loan products mentioned below are residentially secured, typically the lowest rates in the market.
Bank |
Product |
Min rate (% p.a) |
Max rate (% p.a) |
Change from Jan 1 |
RBA |
Overnight Cash Rate |
7.25 |
7.25 |
+0.50% |
ANZ |
Business Overdraft Sec |
9.42 |
10.8 |
+0.30% |
Commonwealth |
Bus Line of Cred Res Sec |
8.67 |
8.67 |
+0.45% |
NAB |
Business OD res sec |
10.58 |
10.58 |
+0.83% |
Westpac |
Bus Overdraft res sec |
10.07 |
10.07 |
+0.47% |
St George |
Commercial OD |
11.00 |
No max |
+0.50% |
A full table of business borrowing rates from CANNEX is below.
Credit card rates are also on the rise as the major commercial banks seek to cope with higher wholesale funding costs. Late last week The Australian Financial Review reported that market leader Westpac has raised the annual charge on some of its most popular credit cards to 20.74%, an increase of between 0.35% and 0.5%.
The Commonwealth Bank has raised rates to 20.44% on the popular Awards Card, Gold Card and Platinum Card.
The banks are blaming the rising cost of credit for the rises.
Dennis Orrock of InfoChoice says: “Sure the wholesale funding rates have gone up but obviously they’re maintaining margins – and they’re certainly not taking a cut there at all.”
Rate changes since beginning of 2008
| Company | Product name | Minimum rate % | Maximum rate % | Change +/- % |
| ANZ Bank | Business Credit Facility | 10.35 | 10.35 | + 0.3000 |
| 10.7 | 10.7 | + 0.3500 | ||
| Business Overdraft Sec | 9.42 | 11.05 | + 0.3000 | |
| 9.42 | 10.8 | + 0.3000 | ||
| Business Overdraft Unsec | 9.42 | 15.45 | + 0.3000 | |
| 9.42 | 15.2 | + 0.3000 | ||
| 9.77 | 15.75 | + 0.3500 | ||
| 9.77 | 15.5 | + 0.3500 | ||
| Commonwealth Bank | Bus Line of Cred Oth Sec | 10.15 | No max | + 0.4500 |
| Bus Line of Cred Res Sec | 8.67 | 8.67 | + 0.4500 | |
| Bus Overdraft (all sec) | 10.07 | No max | + 0.4500 | |
| Business OD (res sec) | 10.07 | 10.07 | + 0.4500 | |
| NAB | Business OD (all sec) | 9.7 | 14.2 | + 0.1500 |
| 9.99 | 14.49 | + 0.2900 | ||
| 10.28 | 14.78 | + 0.2900 | ||
| 10.38 | 14.88 | + 0.1000 | ||
| Business OD com sec | 10.9 | 10.9 | + 0.1500 | |
| 11.19 | 11.19 | + 0.2900 | ||
| 11.48 | 11.48 | + 0.2900 | ||
| 11.58 | 11.58 | + 0.1000 | ||
| Business OD res sec | 9.9 | 9.9 | + 0.1500 | |
| 10.19 | 10.19 | + 0.2900 | ||
| 10.48 | 10.48 | + 0.2900 | ||
| 10.58 | 10.58 | + 0.1000 | ||
| St George Bank | Business Maximiser | 9.17 | No max | + 0.2500 |
| 9.42 | No max | + 0.2500 | ||
| Comm Line of Credit | 10.42 | No max | + 0.2500 | |
| 10.67 | No max | + 0.2500 | ||
| Commercial Overdraft | 10.75 | No max | + 0.2500 | |
| 11 | No max | + 0.2500 | ||
| Westpac | Bus Overdraft bus sec | 9.7 | 11.6 | + 0.1000 |
| 9.95 | 11.85 | + 0.2500 | ||
| 10.07 | 11.97 | + 0.1200 | ||
| Bus Overdraft com sec | 9.7 | 10.45 | + 0.1000 | |
| 9.95 | 10.7 | + 0.2500 | ||
| 10.07 | 10.82 | + 0.1200 | ||
| Bus Overdraft res sec | 9.7 | 9.7 | + 0.1000 | |
| 9.95 | 9.95 | + 0.2500 | ||
| 10.07 | 10.07 | + 0.1200 |
Cannex
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