CBA targets SMEs with new lending product
(8 June 2005 – Australia) Commonwealth Bank has rolled out a "capped" business lending product targeting small and medium sized businesses.
Called Capped BetterBusiness Loan, the product allows businesses to choose from three different cap levels – 0.5 percent, 0.75 percent and 1.0 percent above the equivalent interest rate, with the caps lasting for up to three years.
CBA executive general manager, Corporate & Business services, Karen McGregor, said the product was designed to protect SMEs from the uncertainty of fluctuating interest rates.
"Most banks offer fixed and variable rates only," McGregor said.
"Fixed rate loans provide certainty to businesses but limit their flexibility to repay and redraw, as well as locking in a rate which prevents the business from benefiting from a fall in interest rates," she said.
McGregor said this kind of interest rate risk management product had previously only been available to CBA clients with more than A$500,000 in borrowings.
CBA executive general manager, Corporate & Business services, Karen McGregor, said the product was designed to protect SMEs from the uncertainty of fluctuating interest rates.
"Most banks offer fixed and variable rates only," McGregor said.
"Fixed rate loans provide certainty to businesses but limit their flexibility to repay and redraw, as well as locking in a rate which prevents the business from benefiting from a fall in interest rates," she said.
McGregor said this kind of interest rate risk management product had previously only been available to CBA clients with more than A$500,000 in borrowings.
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