The Middle East conflict started in March 2026 has the potential to affect business finance rates through a spike in inflation, though the situation is unclear. Interest rates in Australia, specifically the cash rate, is determined by the Reserve Bank Monetary Policy Board. Decisions are based on the domestic outlook and economic data and potential impacts from global events. Over time we have seen how events overseas can affect both our economic conditions and our interest rates.

How long the Iran conflict continues and how widespread it becomes are unknown at this stage. But even in the early stages, commentary in Australia is focussed around the impacts on the domestic economy, especially fuel prices and interest rates.

The Governor of the Reserve Bank, Michelle Bullock speaking at a business summit on 3 March reportedly said the unfolding situation was a ‘timely reminder’ of the speed at which things can change. Ms Bullock said it was too soon to say what the impacts may be as it could play out in different ways.

Middle East Conflict and Business Finance Rates

The messaging coming through from experts, including the RBA Governor, is that the situation could result in further pressures on inflation as a result of rising oil prices and disruptions to supply may slow the global economy. However, Ms Bullock also reportedly said that extended impacts on the energy market may cause downward inflationary pressures due to adverse impacts on the global economy.

The closure of key shipping routes may also contribute to inflation with possible increases in shipping charges. Many shipping companies have had to re-route shipments to a longer route, involving more fuel and potentially higher costs for importers of products, materials and other supplies. If higher costs do ensue and these costs are passed on in higher prices to Australian consumers, it may result in inflationary pressures.

Australians may find out how the situation emanating from Iran affects rates with the next RBA cash rate decision due on 17 March. Inflation is already under pressure, and the RBA increased the cash rate at its February meeting. The Iran scenario creates a further issue for the Board to consider. With key oil shipping routes disrupted, the markets forecast oil prices to spike.

The next set of Consumer Price Index (inflation) data is due from the Australian Bureau of Statistics on 25 March. This is a week after the RBA cash rate decision meeting. Whether or not we see a rate rise in March, may depend how the situation in the Middle East plays out in the interim and how the Board views the impacts and potential impacts on Australia’s economy and most importantly, inflation rate.

The next RBA Monetary Policy meeting after March is 3 May. Based on the expert commentary, it appears that at least some in the markets are expecting a rate rise at that meeting.

Will all loans be impacted?

A cash rate increase or decrease by the RBA does not automatically signal changes to commercial credit rates. Commercial lenders make their own rate decisions based on their own forecasts, confidence in different industry sectors, and funding costs. Their decisions are broadly directed by the cash rate as this is the interest rate on overnight borrowings between banks.

When a change to the cash rate is announced and lenders follow, existing loans with a fixed interest rate will not be impacted. For example, this would cover most asset acquisition loans – Lease, Chattel Mortgage, CHP and Rent-to-Own. But existing loans with a variable rate of interest, such as Overdrafts and lines of credit, are usually impacted with a rate and repayment change.

Rates do vary across the commercial credit lending market. The market is extensive and quite diverse, with many specialist non-bank lenders adding to banks and the more well-known finance companies. While the same types of loans with the same features in regard to tax deductions, balance sheet entries etc are available from most lenders, rates and specific inclusions can vary.

For some businesses, specialist non-bank lenders may be more competitive and offer more attractive rates and more workable terms. Many of these lenders are only accessible via their select brokers. Our brokers facilitate that access with our extensive lender base and accreditations.

Securing Competitive Business Finance Rates and Loans

While the current interest rate and trade scenario is uncertain at this time, we can assure operators that we continue to source competitive rates across our commercial loan portfolio. Providing a range of financing solutions to target specific pain points with Overdrafts and Business Loans for cash flow disruptions, and other options.

The Middle East situation may also impact businesses directly with rising fuel prices, supply line disruptions, and increased shipping costs for imports. Shipping lines such as Maersk were quick to announce a change of route from the Suez to the Cape of Good Horn in South Africa. Increasing the time for containers to arrive and potentially increasing charges.

These issues may have varying impacts on industries and businesses, depending on the individual operation and sector. Delayed shipments may disrupt production schedules and/or sales, which may in turn put pressure on cash flow until the situation is resolved.

Operators that are experiencing cash flow issues or would like to pre-empt any issues and shore up their business finances, contact our brokers for a discussion on the solutions available.

Connect with Business.Finance brokers 1300 000 033 for competitive business finance rates amid the current Middle East conflict.

DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS