What are the commercial financing rates in Australia?

Updated June 2025

If you’re looking for the best commercial financing rates, it’s important to understand the different factors that affect the specific rate you’re quoted by a lender. These rates are tailored for various business purposes, including purchasing property and leasing equipment. Factors include the RBA cash rate, but also individual factors including the strength of your business financials, security, loan size and term, and credit history.

Financing options help businesses acquire or upgrade essential commercial assets, such as machinery, equipment, vehicles, and technology.

To give you a working guide, as at June 2025 these are the rates from traditional lenders for commercial loans:

Loan type	Interest rate	LTV	Security
Variable Interest Rates	5.89% to 10.74%	90%	Residential
Variable Interest Rates	5.84% to 8.59%	80%	Commercial
Fixed Rates	5.48% to 8.89%	80%	Commercial
Lease doc	6.54% to 8.89%	80%	Commercial
1 Year Fixed	6.23% to 9.81%	80%	Commercial
2 Year Fixed	6.21% to 9.93%	80%	Commercial
3 Year Fixed	5.85% to 9.88%	80%	Commercial
5 Year Fixed	5.58% to 9.88%	80%	Commercial
Self Employed Low Doc	7.24% +	80%	Commercial
Development Rate	4.89% + line fee	75%	Commercial

Notes:

• These rates reflect the most current published ranges and may vary based on borrower profile, loan amount, and lender discretion.

• Lenders may offer lower rates for residential security or higher LTVs, but for most commercial property (including office buildings), 80% LTV is standard.

• Some lenders have reduced rates in response to recent RBA decisions, and there may be further movement in coming months.

• Specialist loans like a Commercial Retail Loan or Business Franchise Loans make attract different rates.

How do I assess commercial financing rates versus other loan elements?

We often advise our clients that assessing financing rates is crucial, but it’s just one piece of the puzzle.

Here’s our approach to evaluating commercial financing offers more holistically:

Firstly, I always look at the interest rate in context. A lower rate might seem attractive, but it’s not always the best deal. I consider whether it’s fixed or variable, and for how long. A slightly higher fixed rate might offer more stability and better long-term value than a lower variable rate, especially in a rising interest rate environment.

Next, I examine the loan structure. The term length, repayment schedule, and any balloon payments can significantly impact the total cost of borrowing. A shorter term with higher payments might result in less interest paid overall, but it could strain cash flow. Conversely, a longer term with lower payments might be easier to manage but cost more in the long run. Understanding the maximum loan amount available is also crucial, as it helps in planning and ensuring that the loan meets your financial needs without overextending.

I also pay close attention to fees. Origination fees, annual fees, and early repayment penalties can add substantial costs. Sometimes, a loan with a higher interest rate but lower fees can be more economical overall, especially for shorter-term financing. Calculating ongoing loan repayments is essential to manage finances effectively and avoid unexpected financial strain.

Collateral requirements are another critical factor. Some lenders might offer better rates but demand more extensive collateral. I always weigh the risk of pledging assets against the benefits of the loan terms.

Covenants and conditions are often overlooked but can be just as important as the rate. Strict covenants might limit business flexibility, while more relaxed terms could provide valuable breathing room, even if they come at a slightly higher cost.

Lastly, we consider the lender’s reputation and relationship potential. A slightly higher rate from a bank that understands your industry and offers personalised service can be more beneficial in the long run, especially if you anticipate needing additional financing or banking services in the future.

In our experience, the key is to calculate the total cost of borrowing under various scenarios and align that with your business’s cash flow projections and growth plans. It’s not just about getting the lowest rate – it’s about finding the financing solution that best supports your overall business strategy.

Commercial loan FAQs

What is the longest term for a small business commercial loan?

In the Australian context, the longest term for a small business commercial loan generally ranges from 15 to 30 years, depending on the type of loan and the lender. However, it’s important to note that loans with such extended terms are usually specific to certain purposes.

Securing development finance is crucial for property development projects and often involves navigating complex funding processes.

The longest terms are typically associated with commercial property loans. For instance, if you’re looking to purchase a commercial property for your business, you might find loans with terms up to 30 years from some lenders. These are similar to residential mortgages in their structure and duration.

For other types of small business loans not tied to property, the terms are usually shorter:

• Equipment finance loans might extend up to 7-10 years, depending on the expected life of the equipment.
• Business expansion or acquisition loans often have terms of 5-15 years.
• Working capital loans or general business loans typically have shorter terms, usually between 1-7 years.

How long should you have a commercial loan?

The ideal length of a business loan depends on your specific situation. In my advisory work, I always tell clients to match the loan term to the purpose of the funds. If you’re financing a piece of equipment, the loan term shouldn’t exceed the expected useful life of that equipment. For working capital, I usually recommend shorter terms of 12 to 36 months. For business expansion or acquisition, 5 to 10 years might be appropriate. Real estate purchases can justify longer terms of 15 to 25 years. The key is balancing lower monthly payments (which come with longer terms) against the total interest you’ll pay over the life of the loan.

Can you get a commercial loan with no deposit?

Yes, it’s possible to get a business loan without a deposit, but it’s not common and often comes with trade-offs. In my experience, most lenders prefer to see some ‘skin in the game’ from the borrower. However, there are options. Some online lenders offer no-money-down loans, but these often come with higher interest rates or shorter terms. If you have strong business financials and excellent credit, you might secure a loan with no deposit, but be prepared for stricter terms or higher rates. Alternatively, you could explore options like equipment financing or invoice factoring, which typically don’t require deposits.

What’s the easiest commercial loan to get?

In my experience, the easiest commercial loans to obtain are typically:

1. Business credit cards: These are often the quickest to get approved, especially for smaller amounts.
2. Invoice financing or factoring: If you have outstanding invoices, these can be relatively easy to secure.
3. Merchant cash advances: While I usually caution against these due to high costs, they’re often easy to qualify for if you have consistent credit card sales.
4. Equipment financing: Lenders consider the equipment as collateral, which can make approval easier.
5. Online term loans: Many online lenders have less stringent requirements than traditional banks, though rates may be higher.

Remember, “easy” often comes with trade-offs like higher interest rates or fees. I always advise clients to carefully consider the total cost of borrowing, not just the ease of obtaining the loan.

Which banks are best for business loans?

As someone who’s been deeply involved in the Australian commercial finance sector for many years, I can say that the “best” bank for business loans in Australia often depends on the specific needs of the business. However, here are some of the top contenders in the Australian market:

• Commonwealth Bank (CommBank): As the largest bank in Australia and offering a wide range of business lending products, they have a number of products suitable for small to medium enterprises, however their lending criteria is often stricter.
• ANZ: They have a strong reputation for supporting businesses across various industries. Their business overdraft and term loan options are quite flexible.
• Westpac: They’re known for their tailored approach to business lending. I’ve had clients who’ve benefited greatly from their equipment finance options.
• NAB: Their QuickBiz loans have been a game-changer for many small businesses I’ve worked with, offering fast approval for loans up to $250,000.
• Macquarie Bank: While not one of the “Big Four”, they’ve carved out a niche in business banking. Their business vehicle and equipment finance options are particularly strong.
• Bankwest: A subsidiary of CommBank, they often offer competitive rates and have a good reputation for customer service in the business sector.
• Judo Bank: This challenger bank has been making waves in the SME lending space. They take a more relationship-based approach to lending, which can be beneficial for businesses that don’t fit the typical big bank criteria.

It’s also worth noting that in the Australian market, many businesses find value in working with smaller lenders or non-bank financial institutions. These can include:

• Regional banks like Bank of Queensland or Bendigo Bank, which often have a strong understanding of local business environments.
• Online lenders such as Prospa or Moula, which can offer quicker approval processes for smaller loans.
• Specialist lenders like Scottish Pacific for invoice financing or trade finance.

Remember the best bank isn’t just about the lowest interest rate. It’s about finding a lender that understands your industry, offers the right mix of products, and provides the level of service your business needs. I recommend talking to an experienced business finance broker so you can review your options together.