Bank wars: what’s in it for small business?

white piggy bank beside desk calculator

NAB has knocked the breath out of its competitors with it’s UBank online home loans that offer significantly lower interest rates, discounted variable rate mortgage after three years and zero fees. Great news for the average consumer but what’s in it for small business? With whispers that the onslaught has only just begun, this space could soon get very interesting. So far, unless you are refinancing your home loan, the benefit is not obvious, but Westpac has already indicated it’s out to woo business customers and, as confidence increases, is looking to amp up the competition for business credit and business loans.

There is a link between home loans and business transaction accounts, however.

Business people tend to keep the same provider for both home loan and business transaction accounts – so the NAB grab at the home loan market is also an indirect grab for the business customer. As things pick up for business small business owners are less likely to self fund any cashflow shortfalls from their mortgage, instead opting for a line of business credit, overdraw facility on their business account, or business loan.

No wonder the Commonwealth Bank head of retail banking, Mr Ross McEwan, has come out recently to publicly state that CBA is planning to hold its position as the number one bank in the Australian mortgage market, while Westpac is trying to make it easier for mortgagees to switch.

So… if you’re a business owner, and you’re in the market for a mortgage, don’t be afraid to haggle. The bank wars are a great opportunity for you to leverage your position and try for an even better deal on fees, rates and flexibility, both on your home loan and your business banking needs.