Dynamic Business Logo
Home Button
Bookmark Button

Small business urge banks to pass on rate cuts

Westpac’s decision to pass on this week’s official interest rate to small business borrowers has been welcomed by small business industry groups, with the other big four banks urged to follow suit.

The Franchise Council of Australia (FCA), and the Council of Small Business of Australia (COSBOA) have welcomed the move, and have lobbied all the banks to do the same.

COSBOA chief executive Jaye Radisich said home loan rates had been reduced in the past 12 months, but there hasn’t been any “flow-on” for small businesses.

“Most small businesses don’t have the fat in their budgets that major corporations do. So every time there’s a change in interest rates or if their access to credit is denied or there’s other regulatory factors which affect them then they have to make serious decisions in terms of whether there has to be cutbacks in their own business.”

This follows news that NAB have refused to pass on interest rate cuts to consumers, keeping their standard variable mortgage interest rate at 5.74 percent, while official interest rates have dropped to as low as 3 percent.

In a meeting of banks and small business groups in Sydney yesterday, FCA executive director Steve Wright said that the general mood was “gloomy on the current state of funding costs and interest rates” adding that “this is a very positive sign of Westpac at least listening to the concerns of small business”.

The Commonwealth Bank of Australia have also opted to lower their interest rates by 10 basis points, following the RBA’s decision to lower the official cash rate on Tuesday.

People who read this, also liked:
RBA lowers interest rates to 3 percent
Banks won’t pass on rate cuts
Retail body welcomes RBA interest rate cut

What do you think?

    Be the first to comment

Add a new comment

Jessica Stanic

Jessica Stanic

Jessica has a background in both marketing and journalism and is dedicated to making the website the leading online resource for small to medium businesses with ambitions to grow.

View all posts