One in two Australian businesses would switch banks if interest rates on business loans increased by more than half a per cent, new research from East & Partners has revealed.The firm's Business Banking Index which tracks customer sentiment towards banks, asked 1000 CFOs and corporate treasurers to what extent their business would absorb higher costs resulting from the need for banks to hold more capital against their loan books. Thirty per cent of respondents indicated that they would switch banks if rates rose by more than 0.50 per cent. Nearly 14 per cent of Australian enterprises would switch banks if interest rates rose by 0.25 to 0.50 per cent, while a further ten per cent would churn if rates rose by 0.25 per cent."[This is] despite interest rates at generational lows ... and despite the fact variable rates on business financing remains below six per cent and discounted rates are available as low as 4.5 per cent," said Martin Smith, E&P's head of markets analysis."The difference in willingness to shop around for a better rate is interesting, however it is clear any increase in business loan rates would be difficult for businesses to absorb at a time of uncertainty towards domestic and international trading conditions", he said.Further, an upward adjustment in loan-to-value ratios would result in 58 per cent of enterprises changing banks.