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The major bank has launched a new Business Green Loan to support Australian businesses to transition to sustainable practices.
The Commonwealth Bank of Australia (CBA) has announced a new loan product Business Green Loan, which aims to support businesses looking to finance assets and initiatives that promote environmental sustainability.
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The loan offering, which launched to customers on Tuesday (12 March), is available through brokers, the major bank stated.
In a statement to The Adviser, a spokesperson for CBA said: “The Business Green Loan is available through brokers to our business customers with a relationship manager. These are typically mid to larger-sized corporates.”
The loan requires the business to have a loan or cash balance of more than $1 million and has a variable interest rate starting at 6.49 per cent.
To apply for the Business Green Loan, customers will need to open a BetterBusiness Loan or Market Rate Loan with CBA.
The BetterBusiness Loan is a flexible-term loan for businesses looking to borrow more than $10,000, whereas a Market Rate Loan is targeted at customers looking to borrow upwards of $500,000.
Eligible assets and projects for the Business Green Loan could include renewable energy (solar, wind, hydropower, etc) water efficacy, and pollution prevention projects.
The bank went on to say that assets such as energy-efficient motors, lighting, and air conditioning could also be eligible for the loan.
The Business Green Loan may also encompass energy-efficient building upgrades and recycling projects.
The new product aims to build climate change resilience, reduce emissions, and protect natural resources, according to CBA.
CBA’s executive general manager of business lending Grant Cairns said that the loan would target commercial businesses that are “seeking competitive funding for sustainability practices”.
He continued: “There has been a big shift in the types of conversations we are having with our business customers, from small businesses to our largest corporate clients – customers recognise the opportunity to implement sustainable practices that not only advance their environmental goals but also lower operating costs.”
The general manager also said that CBA would be able to adjust the terms of the loan to meet the individual needs of its customers depending on the project and funding requirements.
Cairns commented: “The Business Green Loan complements Business Banking’s existing solutions that can support businesses to action their sustainability goals, including our Green Vehicle and Equipment Finance offering, Sustainable Finance solutions, and our Agri Green Loan.”
The announcement came after Broker Pulse revealed that CBA’s broker usage has been continuously dropping since March 2023.
[Related: CBA broker usage dropped in January: Broker Pulse]
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