Should business owners use an offset account?

8 May 2015
Should businesses offset and save more?

Business loans with offset account

Offset accounts are a very popular addition to home loans; a large proportion of visitors who compare home loans on Canstar?s database look for loans with an offset account.

Offset facilities can also provide a distinct advantage for business owners because – if your running cash balance is high enough – they can shave countless dollars and years off the life of the loan. In simplistic terms this facility works by offsetting your deposit account balance against your total business loan balance.

Say, for instance, you have a $200,000 loan and $15,000 in your offset account. Because of your offset account, you will only be charged interest against $185,000.

Of the 48 term loan products assessed by Canstar, 14, at time of writing, offer offset facilities.

These products are:

Company Name

Product Name

100% Offset Account Linked

AMP Bank Classic Variable Rate Yes
ANZ Bus Mortgage Loan Var Yes
ANZ Business Ln Var (Unsec) Yes
bcu Business Flexi Rate Yes
bcu Business Loan Base Rate Yes
bcu Business Loan Unsecured Yes
bcu Business Premier Rate Yes
Commonwealth Bank BBL Var Non-Res Secured No
Commonwealth Bank BBL Var Res Secured No
Suncorp Bank Business Essentials- Commercial sec Yes
Suncorp Bank Business Essentials-Residential sec Yes
Westpac Business One Ln -Bus Yes
Westpac Business One Ln -Com Yes
Westpac Business One Ln -Res Yes

Source: database. Correct as at 7/5/15.

Overall, it goes without saying that it is in your best interests to regularly review your banking products, as both your commercial needs and the available products continually change. Reducing your small business banking costs can potentially save your business thousands.


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