Business Loan Rates Are Up Three Times This Year
If your business carries a loan or an overdraft, you have likely already felt this. The Reserve Bank has lifted the cash rate three times in 2026.
The cash rate now sits at 4.35 percent. The board held it steady at its June meeting, but another move later this year has not been ruled out.
What Actually Happened
Rates rose in February, March, and May this year. Each rise pushed business loan and overdraft costs up alongside it.
Rising oil prices, linked partly to global conflict, added real pressure on inflation. The Reserve Bank has been clear that it is watching this closely.
The June pause does not mean rates are coming down. It means the board wants more time to see how the earlier rises are flowing through the economy.
What This Means for Your Repayments
Business lending rates move broadly in line with the cash rate, though each lender adjusts independently. Variable-rate loans and overdrafts are the most directly affected.
A loan that felt manageable at the start of the year may now cost noticeably more each month. This adds up quickly across a full year of repayments.
If you have not checked your current rate recently, this is worth doing now rather than assuming nothing has changed.
Why This Catches Businesses Off Guard
Many business owners set up finance once and rarely revisit it. Rates can move several times before anyone notices the cumulative effect.
This is especially true for overdrafts and variable-rate facilities, where the rate adjusts automatically without a new conversation or paperwork.
A facility that was competitive eighteen months ago may not be competitive today, even if nothing about your business has changed.
What To Actually Do About It
Check your current rate against what is available today. Lender competition has not disappeared, even with rates rising overall.
Ask whether your facility still suits your business. A fixed rate offers certainty. A variable rate offers flexibility. Your priorities may have shifted since you first set it up.
Review your cash flow forecast with the higher repayment built in. Do not assume last year’s numbers still hold.
Talk to your bank if repayments are becoming difficult. Lenders generally have support options, including repayment adjustments, for businesses going through a genuinely tight period.
A Word on Timing
The Reserve Bank meets again in August. Several major banks expect rates to hold for now, though some have not ruled out a further rise depending on inflation data.
This uncertainty makes it worth building a buffer into your planning, rather than assuming today’s rate is locked in for the rest of the year.
Frequently Asked Questions
Will rates definitely rise again? No decision has been made. Some economists expect a hold through the rest of 2026, while others see a possible rise in August depending on inflation data.
Should I switch from variable to fixed? This depends on your priorities. A fixed rate gives certainty over repayments. A variable rate offers more flexibility but moves with the cash rate.
Is now a bad time to apply for new finance? Not necessarily. Lender competition remains strong in some areas, particularly among non-bank lenders. Comparing options properly still matters.
Get a Clear Picture of Your Cash Flow Talk to Edulink
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📞 Call us today: 04 044 71 816
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