Four rate rises in 2026: why brokers should treat this as a working capital conversation

The Reserve Bank lifted the cash rate by 25 basis points to 4.60% on 29 September 2026. The Monetary Policy Board's decision was unanimous, and it takes the cash rate to its highest level since November 2011.

Most of the commentary since has focused on what the move means for borrowers. But for business owners, the bigger story is the cumulative one.

"Forget the latest 25 basis points for a second," says Octet's National Business Development Manager, Ben Howell. "Since January, we've now had four rate rises, adding up to a full percentage point."

The RBA lifted the cash rate in February, March and May, taking it from 3.60% to 4.35%, before holding in June and August. September's rise brings the 2026 total to 100 basis points.

The Board has also signalled it may not be finished. It said it will do what it considers necessary to return inflation to target, "including increasing the cash rate target further if needed."

For SMEs, that sustained tightening doesn't arrive on its own.

In its statement, the Board said growth in aggregate demand needs to remain subdued for a period to ease capacity pressures and bring inflation back to target. Its business liaison found firms facing cost pressures and either raising prices or looking to do so, while higher fuel prices have been partly passed through to other goods and services.

Labour costs are moving too. Under the Fair Work Commission's Annual Wage Review, modern award minimum rates increased by 4.75% from 1 July 2026.

That leaves many business clients caught in the middle.

"Their costs can be going up. Their funding is getting more expensive. But they can't necessarily rely on stronger demand to absorb those increases," Ben says.

There is another cost that rarely makes the headlines: the time between doing the work and being paid for it.

"Imagine your client completes $500,000 worth of work today and doesn't get paid for another 60 days," Ben says. "They still have to fund everything that happens in between."

That includes wages, super, suppliers, fuel, rent, tax and the next job.

Payment times were already under strain before September's decision. CreditorWatch's April 2026 Business Risk Index found invoices more than 60 days overdue at their highest level since January 2020. CreditorWatch described a squeeze in which higher interest rates lift debt-servicing costs, inflation and energy prices push up operating expenses, and weak demand limits businesses' ability to pass costs on.

The gap between paying suppliers and collecting from customers is still there. Each rate rise simply makes it more expensive to carry.

When rates rise, the natural first conversation with clients is about the cost of their existing debt. That conversation matters, but with business clients it is worth going a step further.

Useful questions include how long customers are taking to pay, whether supplier costs are increasing, whether the business is carrying more inventory, and how it is funding the gap in between.

"The opportunity might not necessarily be refinancing a loan," Ben says. "It could be restructuring how the business funds its trading cycle."

Depending on the client, that could mean debtor finance against receivables, trade finance to help fund supplier purchases, or another working capital solution.

Brokers don't need to become economists every time the RBA moves rates, or working capital experts overnight. What matters is understanding what these changes could mean inside a client's business.

SME clients rarely describe their situation in technical terms. They are more likely to say cash is getting tight, customers are taking longer to pay, a big supplier payment is coming up, or simply that they need some money. Each of those is a signal worth exploring.

"So don't just ask: 'How much do you need?'" Ben says. "Ask: 'What's happening inside the business that's creating the need?'"

With funding dearer, costs rising and demand deliberately held back, the brokers who look past the loan amount to the trading cycle behind it will be better placed to find the right structure for their clients.