03/02/2026
Yesterday, the Reserve Bank of Australia increased the cash rate by 0.25% to 3.85%.
Why did the RBA make this decision?
The Board noted that inflation picked up materially in the second half of 2025, with private demand, including business investment, growing stronger than expected. Labour market conditions remain tight, unit labour costs are elevated, and the RBA has signalled it will do what's necessary to bring inflation back to target.
What does this mean for your business?
Whether you're financing a fleet upgrade, purchasing equipment, managing cash flow gaps, or funding business growth, today's decision will impact your borrowing costs. Higher rates mean increased costs across vehicle finance, equipment loans, overdrafts, debtor finance facilities, and commercial lending.
How to navigate this environment:
✅ Lock in planned investments — If you've been considering vehicle, equipment, or capital expenditure, securing finance now could protect you from further rate increases. Delaying may cost you more in the long run.
✅ Review your finance structures — Fixed rate options can provide repayment certainty in a rising rate environment. We can help you compare chattel mortgages, finance leases, commercial hire purchase, and business loans to find the optimal structure for your situation.
✅ Protect your cash flow — Rising rates put pressure on working capital. If you're relying on an overdraft or dealing with slow-paying customers, now is the time to review your facilities and ensure they're working hard for you.
✅ Consider debtor finance — Waiting 30, 60, or 90+ days for invoices to be paid ties up cash your business needs. Debtor finance (invoice finance or factoring) unlocks the value of your outstanding invoices, improving cash flow without taking on traditional debt. In a rising rate environment, faster access to your money can be a game-changer.
✅ Review your overdraft facility — Is your overdraft limit still fit for purpose? Are you paying for capacity you don't use, or struggling with a limit that's too tight? We can help you right-size your facility or explore alternatives that better suit your needs.
✅ Maximise tax efficiencies — The right finance structure can deliver meaningful tax benefits. From instant asset write-offs to lease structuring, we'll help you make the most of available incentives.
✅ Refinance and consolidate — If you have multiple facilities, older fixed rates, or variable rate arrangements, a review could uncover opportunities to reduce costs, simplify your lending, or free up cash.
✅ Plan with a buffer — Ensure your business can comfortably service all commitments with room for further rate movements. Stress-testing your cash flow is essential.
Our expertise:
At Simply Finance, we specialise in:
→ Overdrafts & working capital facilities → Debtor finance & invoice funding → Asset & equipment finance → Vehicle & fleet finance → Commercial business loans → Refinancing & debt restructuring
We work with businesses of all sizes to secure competitive, tailored finance solutions — not a one-size-fits-all approach. Our job is to help you find the right funding mix to support your operations and growth, whatever the rate environment.
If today's decision has you thinking about your cash flow, current facilities, or upcoming plans, let's have a conversation. We're here to help you make smart, informed decisions.
📞 Get in touch | 🌐 www.simplyfinance.com.au
Source: Reserve Bank of Australia Media Release, 3 February 2026
