Whether the RBA cuts official interest rates today – and how much of any cut is passed on by Australia’s mortgage lenders – will make a big difference to many Australian SMEs, with new research showing 28% use their home loan to finance their business in some way.
The data, released by SME software firm MYOB following a survey of over 1,000 SMEs, shows how tightly linked mortgage rates and business finance really are.
Just under 15% of SMEs utilise a line of credit through their home loan to help fund their business, 5% have funded their business by increasing the value of their home loan and 5% funded their business by redrawing against equity in their mortgage.
A further 4% have used cash sitting in their mortgage offset account to pump into their business.
MYOB chief Tim Reed says the fact that the big banks did not pass on the RBA’s full 50-basis-point cut to mortgage holders hit many SME owners with a double whammy – their housing finance and their business finance didn’t decrease as much as it should have.
“For many business owners, even those without commercial finance, an interest rate move doesn’t just affect their ability to repay the family home loan. For too many, home loan interest rate moves also affect their ability to keep their livelihood on an even
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