Business Loans in 2026-27: Rates, the $20,000 Instant Asset Write-Off and How to Compare Lenders
As at July 2026, the RBA cash rate sits at 4.35% after three increases earlier this year, and secured business loans from major Australian banks are typically priced around 7% to 11% p.a., with unsecured loans from fintech lenders often 12% to 25%+ p.a. The new financial year has also brought a proposed permanent $20,000 instant asset write-off for small businesses from 1 July 2026, which may make equipment finance timing more attractive — though the measure is not yet law and eligibility criteria apply.
What are business loan interest rates in Australia right now?
The Reserve Bank of Australia held the cash rate at 4.35% at its June 2026 meeting, following three consecutive increases earlier in 2026, according to the RBA. The next cash rate decision is due on 11 August 2026, and economists remain divided on whether the Board will hold or move again, so any figures here can change.
What that means for business borrowers, as at July 2026, is roughly this: secured business loans from major banks are generally in the 7% to 11% p.a. range, unsecured loans from fintech and online lenders typically run from 12% to 25%+ p.a., and equipment or asset finance is often priced between 5% and 9% p.a., based on published market guides for 2026-27. Your actual rate depends on your security, trading history, industry and credit profile, and is always subject to the lender's normal credit assessment and approval.
Demand for business finance remains strong. New lending to Australian SMEs grew from $122.5 billion in 2023 to $153.7 billion in 2024, according to the OECD's Financing SMEs and Entrepreneurs 2026 report. At the same time, 73% of Australian SMEs reported cash-flow constraints heading into FY26, according to industry publication The Adviser — which is exactly why the structure of a loan often matters as much as the headline rate.
What is the $20,000 instant asset write-off and is it permanent?
The Federal Government has announced it will make the $20,000 instant asset write-off permanent from 1 July 2026 for small businesses with aggregated turnover under $10 million, as confirmed by the Australian Taxation Office. Under the measure, eligible businesses can immediately deduct the full cost of eligible depreciating assets costing less than $20,000 each, rather than depreciating them over several years.
Two important caveats. First, as at July 2026 the permanent measure has been announced but is not yet law, so you should confirm its status with the ATO or your accountant before relying on it. Second, the write-off is a tax deduction, not a cash grant — it may improve your after-tax position, but it doesn't reduce the price of the asset.
Where finance comes in: financed assets can generally still qualify for the write-off, because eligibility typically turns on when the asset is first used or installed ready for use, not on how it was paid for. That could mean a ute, machinery or equipment purchased with a chattel mortgage or equipment loan may be deductible upfront while you spread the cost over the loan term. You can model repayments with our loan repayment calculator or compare a lease against a loan with the leasing calculator. Always get tax advice for your specific situation.
Secured vs unsecured business loans: what's the difference?
A secured business loan is backed by an asset — commonly commercial or residential property, a vehicle, or equipment. Because the lender's risk is lower, secured rates are typically several percentage points cheaper and loan amounts can be larger, with longer terms available.
An unsecured business loan doesn't require specific security, which usually means faster approval and less paperwork, but higher rates and shorter terms. Many unsecured lenders will still ask for a personal guarantee from directors, so "unsecured" rarely means "no personal exposure".
- Secured loans may suit larger, planned investments — premises, fit-outs, major equipment — where the cheaper rate outweighs the slower process.
- Unsecured loans may suit short-term working capital needs, stock purchases or bridging a cash-flow gap, where speed matters more than rate.
- Equipment and asset finance sits in between: the asset itself is the security, which typically keeps rates lower than unsecured lending.
Should you borrow from a bank or a non-bank lender?
The RBA has noted a significant rise in business lending by non-bank and specialist private credit lenders since 2022, particularly for smaller loans to SMEs. That competition is generally good news for borrowers: more lenders means more products, faster turnaround options and more appetite for businesses that don't fit the major banks' standard criteria.
Banks typically offer the sharpest rates for well-established businesses with strong financials and security to offer. Non-bank lenders may be more flexible on trading history, industry, low-doc income verification for self-employed borrowers, or credit blemishes — usually in exchange for a higher rate. Neither is automatically better; it depends on your circumstances, and every application is subject to the lender's credit assessment.
Comparing across both groups is where borrowers often leave money on the table. Our loan comparison calculator can help you weigh up two offers side by side, including fees.
How can a broker help you compare business loans?
A mortgage and finance broker like Brokio compares business loan options across 40+ lenders — majors, second-tier banks and non-bank specialists — and matches the loan structure to how your business actually earns and spends. For a business in Melbourne's western suburbs, that local context matters: a Tarneit trades business with seasonal cash flow needs a different structure to a Point Cook medical practice buying its rooms.
A broker can also package the application properly — financials, BAS, bank statements, asset details — which may improve your chances of a smooth assessment, though approval always remains at the lender's discretion. Brokio is based in Williams Landing and works with businesses across Werribee, Truganina, Point Cook and the wider western suburbs, as well as greater Melbourne.
What do you need to apply for a business loan?
Requirements vary by lender and loan type, but most full-doc applications ask for:
- An active ABN and, for most lenders, GST registration
- Business financials — typically the last one to two years of statements and tax returns
- Recent business bank statements (often 3 to 6 months)
- BAS statements, and identification for directors
- Details of the asset or purpose being financed, and any security offered
If your financials aren't up to date — common for self-employed borrowers — low-doc options exist with some lenders using alternative verification such as BAS or accountant declarations, typically at higher rates. Eligibility criteria apply to all of these products.
Frequently asked questions
Is interest on a business loan tax deductible?
Interest on a business loan is generally tax deductible where the borrowed funds are used for income-producing business purposes. The deduction applies to the interest and eligible fees, not the principal repayments. Confirm your specific position with a registered tax adviser.
Can I still claim the instant asset write-off if the asset is financed?
Generally yes — eligibility typically depends on when the asset is first used or installed ready for use, not how it was paid for, so assets bought with a chattel mortgage or equipment loan may still qualify. As at July 2026 the permanent $20,000 write-off is announced but not yet law, so check current details with the ATO or your accountant.
How long does business loan approval take in 2026?
Unsecured online lenders can indicatively approve some loans within 24 to 48 hours, while secured bank loans commonly take one to several weeks depending on valuations and documentation. Timeframes vary by lender and are subject to the lender's normal credit assessment and approval.
Does using a broker cost my business more?
Brokers are typically paid a commission by the lender on settled loans, and Brokio discloses how it is paid before you proceed. Comparing 40+ lenders through one application process may save you time and could surface options you wouldn't find approaching one bank directly, though outcomes depend on your circumstances.
Important information
This article contains general information only, current as at July 2026, and does not take into account your objectives, financial situation or needs. It is not personal financial, credit, tax or legal advice. Interest rates, lending criteria, and government measures — including the proposed permanent $20,000 instant asset write-off, which is not yet law — can change at any time; confirm current details via official sources such as the RBA and the ATO. All loan applications are subject to the lender's normal credit assessment and approval, and eligibility criteria, fees and charges apply. Consider seeking advice from a licensed adviser and a registered tax agent for your situation.