Big Four banks pass on cash rate cuts to small businesses
The Reserve Bank of Australia yesterday announced a drop in the cash rate by 0.25% to a historical low of 1.75%. There is generally an expectation that lenders will pass on at least some of the rate cut to their variable rate home loan customers, and you can track which banks have done that in finder's round-up. But there is often no such expectation for holders of other types of variable rate loans.
However, on this occasion business borrowers will get a better deal. All of the "Big Four" banks have announced a rate cut to their variable rate business loan products, in what will be a welcome move for small business borrowers.
Commonwealth Bank announced a cut to its variable rate home loan products as well as its Standard Variable Business Rate by 0.25% p.a. The rate cut will be effective on 20 May 2016.
Westpac also passed on the full rate cut of 0.25% for its variable rate small business loans. Borrowers can expect the rate to be applied on 23 May 2016.
ANZ announced it was passing on the rate cut in a tweet and media release to its business customers. The full rate cut of 0.25% will be applied to all business variable lending products on 13 May 2016.
The full rate cut of 0.25% was also passed onto NAB's business customers and will be effective on 16 May 2016.
The RBA decision coincided with the Budget 2016 announcement which had a focus on small business, with the government looking to introduce a tax cut from July 1. The rate will be reduced to 27.5% and the threshold for eligible businesses will rise from $2 million in annual turnover to $10 million.