A full point on your loans since February. The RBA also told you something more useful than the rate

The cash rate is now 4.60%. It started the year at 3.60%, so if your business loan or overdraft is variable and your lender has passed every rise on, you are paying about $10 a year more interest for every $1,000 you owe than you were in January. On $240,000 of debt that is $2,400 a year, all of it straight off your profit. That is the bad news, and it is smaller than it sounds. The useful news is one line in the Reserve Bank's own statement, which says businesses are already raising their prices or getting ready to. If you have been putting off yours, you just ran out of reasons.

Four letters this year

The Reserve Bank's board meets eight times a year. In 2026 it has raised the cash rate four times and held it twice:

• 4 February: up a quarter point to 3.85%
• 18 March: up to 4.10%
• 6 May: up to 4.35%
• 17 June and 12 August: held
• 30 September: up to 4.60%, decided the day before

That is a full percentage point in eight months. The last time the cash rate was this high was 2011. The September vote was unanimous, and the board said it will keep "increasing the cash rate target further if needed". Its reasons were inflation that is still too high, oil and energy prices pushed up by the conflict in the Middle East, and an economy running close to capacity.

The cash rate is not the rate on your loan. It is the rate banks pay each other overnight, and your lender prices your variable loan, overdraft and business card off its own reference rate, which normally follows it. So the question for you is not what the RBA did. It is what your lender did next.

Put it on your own debt

Here is an example. The numbers are made up, so swap in yours.

A cafe has $200,000 left on a variable loan that paid for the fit-out, and $40,000 drawn on its overdraft. That is $240,000 of variable debt. Assume the lender passed all four rises through in full.

• The September rise alone: 0.25% of $240,000 is $600 a year, about $50 a month.
• All four rises together: 1.00% of $240,000 is $2,400 a year more than the same debt cost in January.

That is a rough figure. On a loan you are paying down, the balance shrinks each month, so the real number is a little lower. On an overdraft you keep fully drawn, it is about right.

Now the part that matters. Say the cafe keeps 10 cents of profit from every dollar it takes. To earn back $2,400 of extra interest by selling more, it needs about $24,000 of extra sales. Selling your way out of an interest bill is slow. Pricing your way out is not, which is the next section.

A rule of thumb for any loan: every quarter point costs $2.50 a year for each $1,000 of variable debt. Multiply by your balance in thousands and you have it.

Read your lender's letter, not the headline

Three checks, ten minutes, on your last statement or loan agreement:

• Is it variable at all? If you fixed your rate before February, none of this has reached you yet. Find the date the fixed period ends, because that is when all four rises land at once.
• Did the lender pass it on, and by how much? Lenders are not required to move their rates by exactly what the RBA moves. Your statement or rate change notice shows the new rate. Compare it with the rate you had in January.
• What is your margin? Most business lending is a reference rate plus a margin for your business. The reference rate follows the RBA. The margin is set between you and the bank, and you can ask for it to be reviewed.

The line in the statement worth more than the rate

Buried in the RBA's statement is this: its business liaison "indicates that firms are experiencing cost pressures and are either increasing the prices of their goods and services or looking to do so".

That is the central bank telling you your competitors are repricing. For an owner who has held prices since last year out of worry about losing customers, that is cover. Your customers are seeing prices rise everywhere, which makes a modest rise on your menu or price list far less noticeable than it would be in a quiet year.

The maths is lopsided in your favour. If the cafe above turns over $600,000 a year, a 2% price rise is worth $12,000 before any lost sales. That is five times the full year of extra interest. Even if a few customers drift, there is a lot of room before the rise stops paying for itself.

Do not make it a blanket rise, though. The same statement says growth in consumer spending is "easing gradually" and that housing prices have fallen in most capital cities. Your customers with mortgages got the same four letters you did. Put the rise where you have pricing power: the items people buy out of habit, the services they book because of the person who does them, not the line they compare with the shop next door.

If you surcharged card payments, there is a second reason to move now. The surcharge stopped on 1 October, the day after this rise took effect, and we covered what that does to your fees in the card surcharge ban briefing. Two costs landing in the same week is the moment for one considered price change, not two nervous ones.

What it does to the price of your business

When a small business sells, the price is normally set on its profit before interest. A buyer values what the business earns, then pays off your loans out of the sale money. So your interest bill does not lower the multiple a buyer pays. It lowers what you walk away with, dollar for dollar, because every dollar of debt still owed at the sale is a dollar that goes to the bank instead of to you.

The other effect is quieter. Many buyers of small businesses borrow to buy. When their money costs more, the same profit supports a smaller loan, and a smaller loan means a lower offer. That is not a figure anyone can put on your business today. It is a reason to make the profit itself bigger and better evidenced, which the price rise above does, rather than wait for rates to fall before you sell.

The next date

The board meets again on 2 and 3 November 2026, with the decision on the 3rd. It has said it is ready to go again. Plan your cash for one more quarter point, and if it does not come, you are ahead.