Business rates go up

Banks have not reduced interest rates for business customers at all over the last six months and have in fact increased interest rates for more than two thirds of customers. East & Partners' half-yearly SME Banking report shows that 68.8 percent of small and medium sized business companies said they experienced an increase in their loan interest rate over the last six months. No SME interviewed reported a decreased lending rate, East said.

The Reserve Bank of Australia's policy interest rate fell by four percentage points over the period covered by East's review. Banks have announced some cuts to small business interest rates over this time but have also acknowledged increases in margins for risk. East said that 51 per cent of SMEs are now looking to borrow in the next six months, down from 77 per cent twelve months ago.

Source: The Sheet