Big Four bank cuts rates for SMEs

by Mike Wood04 Mar 2021

Westpac has announced a significant cut in rates on small business loans as they attempt to help SMEs navigate their way out of the COVID-19 pandemic.

They have taken 0.50% off their SME Guarantee interest rate to drop it from 4.48% to below 4% on 3-year unsecured fixed rates with Business Advance if SMEs apply before April 30 2021.

For those on longer loans, there are also cuts: from 3.09% to 2.99% on 3-5 year secured variable loans.

“One of the ways we can support brokers is by helping them support their customers,” said Westpac Business division Chief Executive Guil Lima. “That’s why today we’ve announced cuts to our SME Guarantee loans. The rate cuts will help brokers start conversations with their clients as Australia begins to move out of recession and back towards growth, albeit slowly.”

“Of course, this very much comes down to the individual businesses and what’s right for them, but for those who have come through the pandemic well and are looking to upgrade technology or equipment or purchase a business premises – this may be something for them to consider.”

Lower rates such as these could be vital in helping SMEs rebound after taking a hit during the pandemic.

“If you look at what the RBA has said low rates are essential to help our economy grow again,” said Lima. “We know that small businesses are really the engine room of the Australian economy and putting a low rate offer on the table is one of the ways we are supporting small businesses grow. Under the SME Guarantee we have both fixed and variable rate products on offer for finance up to a million dollars.”

With the government backing for up to 50% of the value of SME loans set to end in the near future, Westpac hope that this rate cut will help their customers to get in while they can.

“There is only a short time left to take up finance under the Federal Government’s SME Guarantee which concludes at the end of financial year,” said Guil Lima. “Westpac has dropped some of our SME Guarantee rates to further help businesses looking to unlock this type of finance before the offer ends.”

“Westpac has been a big supporter of the Federal Government’s SME Guarantee loans which have helped businesses access low-rate finance during the pandemic. The SME Guarantee loans are a good example of how industry and governments can work together to quickly develop practical solutions that help small businesses access credit as they look to grow again.”

“Australia’s small and medium sized businesses know better than anyone what’s best for them. Every small business is unique and there’s no one-size-fits-all approach. Our SME Guarantee rates are really about giving them something to consider.”

“At this point in the economic cycle when rates are so low it may be the right time for businesses to start thinking about growing again. Now we know not all businesses are in this position, and some are still doing it tough, but there are others who have come through the pandemic well and may be in a good position to take advantage of low-rate finance.”