CommBank rolls out zero interest business loan to provide Christmas boost

With restrictions lifted and trading resuming across Australia, Commonwealth Bank is offering a zero interest loan to help businesses regain their footing as they approach the Christmas period.

The new loan offering, dubbed the Business Boost Loan, will provide customers with up to $100,000 in funds. In lieu of interest, they will be charged a $200 fee for every $5,000 borrowed, which will be added to the principal and paid off over the life of the loan.

Businesses can also take advantage of an upfront three month repayment holiday, meaning they won’t have to make their first loan repayment until March 2022 when business activity has hopefully picked up.

To apply for the loan, business owners must visit CommBank’s digital lending platform, BizExpress Online. A lending decision will be made within 24 hours and successful applicants will receive funds shortly after.

CBA group executive of business banking, Mike Vacy-Lyle says many businesses emerging from lockdown still face enormous uncertainty and simplified loan products can help them ride out bumpy revenue flows.

“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 restock and rehire,” he said.

“Meanwhile, other businesses are looking at expanding or capitalising on pent up customer demand.

“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.”

Earlier this month, ScotPac announced a similar offering. Its Bounce Back Fund lets businesses access up to $1 million in funding, with the first three months of interest on loans completely waived. 

CommBank’s Business Loan Boost will be offered as part of the SME Recovery Loan Scheme, a government-backed program which hopes to minimise the impact of COVID-related shocks to small and medium-sized businesses.

Under the scheme, SMEs that have been adversely impacted by the pandemic can access low-rate loans of up to $5 million, with the government guaranteeing 80% of the loan amount. The scheme is due to wind up on 31 December 2021.

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