The Reserve Bank of Australia has increased the cash rate by 0.25 percentage points to 4.60%, adding another reason for business owners to review borrowing costs, cash flow, pricing and planned investment.
The RBA made the decision on 29 September 2026, with the new cash rate taking effect on 30 September. It is the fourth 0.25 percentage point increase during 2026, following increases in February, March and May.
The RBA said inflation remains too high and pointed to domestic capacity pressures, stronger-than-expected recent inflation outcomes and higher global energy prices among the factors behind the decision.
For businesses in Newcastle, Maitland, the Hunter Region and across Australia, the immediate priority is not trying to predict the next interest-rate decision. It is understanding how the current increase may affect the numbers in your own business.
Key highlights for small businesses
- Review business loan rates – The cash rate does not automatically determine the exact interest rate charged on a business loan, overdraft or line of credit. However, lenders may adjust variable rates following an RBA increase. Check the actual rate, repayments and fees applying to each facility rather than assuming they will remain unchanged.
- Update your cash-flow forecast – If your business has variable-rate debt, higher repayments can reduce the cash available for wages, suppliers, tax, superannuation and other operating costs. Update your forecast using your current borrowing rates and consider testing what happens if costs remain elevated.
- Check margins before changing prices – Interest is only one cost facing businesses. The RBA has also noted continuing cost pressures across the economy. Before increasing prices, review your gross margin, overheads and profitability by product or service so any decision is based on your actual numbers rather than a general percentage increase.
- Reassess planned borrowing and investment – Equipment purchases, vehicles, renovations and expansion projects may look different when finance costs rise. Recalculate repayments and expected cash returns before committing to significant new debt.
- Look closely at working capital – Businesses carrying large amounts of inventory or waiting a long time for customers to pay can become more reliant on overdrafts and short-term finance. Improving debtor collection, invoicing promptly and reviewing stock levels may help reduce unnecessary borrowing.
- Review existing finance, not just new loans – Check older business loans, equipment finance and revolving facilities as well as any new borrowing. Understand whether rates are fixed or variable, when fixed periods end, and whether refinancing would involve break costs, establishment fees or other charges.
- Keep tax and super commitments in your forecast – Higher finance costs should not push upcoming tax, BAS, PAYG, payroll or superannuation obligations out of sight. Keeping these amounts visible in your cash-flow planning can help avoid a short-term cash shortage becoming a larger compliance issue.
What this means for your business
Higher interest rates affect businesses differently.
A business with little debt may experience a limited direct impact, while a business using overdrafts, equipment finance, commercial property loans or other variable-rate facilities could see a more noticeable increase in financing costs.
The important step is to quantify the effect.
Start by reviewing your current profit and loss statement, balance sheet, loan balances and cash-flow forecast. Check how much interest the business is paying each month and compare this with earlier periods.
You may also want to prepare several cash-flow scenarios. For example, consider what happens if borrowing costs remain at their current level, sales soften or supplier costs continue to increase. This can highlight potential pressure points before they become urgent.
Businesses should also avoid making major decisions solely because the RBA has changed the cash rate. Your customer demand, margins, available cash, debt levels and longer-term business plans all need to be considered.
For Newcastle, Maitland and Hunter Region businesses, this is a useful time to review:
- business loan and overdraft costs
- monthly cash-flow forecasts
- debtor collection and payment terms
- pricing and gross margins
- budgets for the remainder of the 2026–27 financial year
- planned equipment purchases or expansion
- the level of cash held for tax and other upcoming obligations.
Bottrell Accounting provides business advisory, accounting and business accounting support to help business owners understand their financial position and prepare budgets and cash-flow forecasts.
Need help reviewing your business cash flow?
Speak with the Bottrell Accounting team if you would like assistance reviewing your cash flow, budgets, business performance or the financial impact of changing borrowing costs.
This article provides general information only and does not constitute financial, credit, tax or investment advice. Interest rates, lending terms and financial circumstances differ between businesses. Consider obtaining advice appropriate to your circumstances before making financial decisions.
