CBA opens green asset finance option for business customers

Commonwealth Bank will offer discounted loans on green assets for its business customers as it looks to chase demand from clients to fund clean, green equipment and vehicles.

Commonwealth Bank will offer cheaper asset financing for solar panels and wind power amid a broader push for green lending to business customers. Picture: Getty Images

Business lending is set to go electric at Commonwealth Bank, with the nation’s biggest financier aiming to grow its business bank loan book with the launch of a green offering.

CBA will offer business customers cheaper loans for electric vehicles and equipment, charging and storage stations, renewable energy such as wind and solar, and hydrogen powered machinery.

It says the loans will finance for electric and hydrogen vehicles at a 1 per cent discount to the standard rate, while other qualifying assets would merit a 0.5 per cent cut to borrowing rates. Vehicle loans will be limited to $250,000.

The launch of the green asset financing program comes in the wake of several moves by CBA to offer green lending options.

The bank launched a green home loan last year, soon followed by a home improvement loan allowing customers to borrow to fund more energy-efficient residential properties.

CBA asset finance general manager Chris Moldrich said Australian businesses were under-served with clean lending options, but research showed there was demand.

“We see a big opportunity to help customers transition to green and wanted to provide an offering to help and support that,” he said.

CBA asset finance general manager Chris Moldrich.

Mr Moldrich said CBA had been considering the launch of a green lending program for asset finance for some time.

“We’ve been asking our business customers a lot more about what they want to do,” he said.

“We’ve had energy-efficient equipment finance options available, but we’re going out more broadly with the explicit green offering.”

CBA’s energy-efficient asset financing currently accounts for 5-10 per cent of the bank’s total loan book.

The bank is banking on growing the clean asset financing segment as businesses pick up the cheaper loans tied to green equipment.

Mr Moldrich said he expected some businesses might make use of the green asset scheme in the coming months as the instant asset write-off scheme was set to expire on June 30.

“There’s also some of the other government incentives around fringe benefit and tax benefit around purchasing electric vehicles which are coming into play,” he said.

Mr Moldrich said the increase to the cash rate, which has climbed 10 times since April last year, had done little to dent business appetite for lending.

He said there was still “quite a high level of demand” from customers to finance equipment.

“There’s obviously quite a heavy level of interest in equipment more broadly,” he said.

The green lending push comes as CBA tries to expand its business bank.

The lender has invested $600m into the business bank in a bid to implement a technology transformation alongside adding new bank staff.

At its results in February the business bank reported a $1.97bn profit.

Originally published as CBA opens green asset finance option for business customers