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Commonwealth Bank provides businesses with lending solution to manage cash flow and interest rate risk

20 August 2007

Australian businesses are always looking for more flexible options when it comes to managing their cash flow, and exposure to external impacts such as interest rates. For the first time, an Australian bank is offering businesses the opportunity to take care of both their lending and interest rate risk management needs in one simple innovative solution.

Flexi Loan is the Commonwealth Bank’s new financing solution, providing businesses with a total facility limit, which they can draw down and repay depending on their cash flow requirements. In addition, there are integrated interest rate risk management strategies available for when businesses want to manage their exposure to movements in interest rates.

According to Robert De Luca, Executive General Manager Corporate Financial Services, Commonwealth Bank "The drought and high oil and commodity prices are all impacting costs for Australian businesses. Any movement of prices on these inputs also affects the cash flow of businesses."

"On top of this, many Australian businesses are finding themselves exposed to the rising pressure of interest rates. Flexi Loan provides businesses with a flexible solution to the particular demands they’re facing in a given month or quarter.

"Managing interest rate exposure is something Australian businesses are increasingly looking to do, particularly in the current climate where rising rates are anticipated", Mr De Luca said.

The interest rate risk management strategies available through Flexi Loan are adaptable depending on a businesses preferred risk management strategies, including caps, collars and fixed rates.

Mr De Luca added, "We anticipate that businesses’ that will be looking for this kind of flexibility are those involved in agriculture, manufacturing and property development that typically have variable or seasonal cash flow requirements or need to draw down funds on a periodic basis.

"Similarly businesses who typically have medium-term working capital or long-term finance needs, or those who currently have multiple loans and want the flexibility and ability to reset interest rates on each rollover will also find Flexi Loan an ideal solution," Mr De Luca concluded.

Media Note: Rob De Luca and Jon Sutton are available for further comment

ENDS

Bryan Fitzgerald
Commonwealth Bank
Phone: (02) 9378 2663
Mob: 0414 789 649
Email: fitzgeb@cba.com.au