CBA has announced it will offer eligible small businesses a zero interest business loan with a three month repayment holiday.
The two-year 'Business Boost' unsecured loan is available up to $100,000 for eligible existing CBA customers via the bank’s self-service digital lending platform, BizExpress Online.
No interest is payable for the life of the loan. Instead, businesses will be charged a $200 fee for every $5,000 they borrow - effectively a 4% interest rate.
CBA Group Executive Business Banking, Mike Vacy-Lyle, said the Business Boost loan has no hidden costs for customers.
"[Businesses] want simplicity and certainty during what has been a very challenging period. We’ve worked to deliver a unique offering that will provide just that, with no hidden costs, no variable rates, and in fact, no interest rate at all,” Mr Vacy-Lyle said.
"We’re giving businesses fast access to cash to help boost their reopening plans.
"The various restrictions associated with COVID-19 meant many small businesses struggled to generate much revenue over the past few months, and these businesses now need to be able to re-stock and re-hire.
"One example of how this meets customer needs, is the gym owner who accessed our zero interest loan to help them manage a quieter holiday period while preparing for a busier New Year.
"They told us they had previously been hesitant to take out a loan with a variable interest rate, but felt reassured with the Business Boost loan as they know exactly what they need to pay over the loan period and don’t need to make their first repayment until March 2022 when business will be more consistent.”
To access the loan, customers need to meet eligibility criteria of the Government SME Recovery Scheme: small to medium sized businesses with up to $250 million turnover, those self-employed, and not-for-profits and have an ABN.
An establishment fee is added to the principal of the loan and will be paid by instalments as part of the principal from when an account is set-up.
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