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Banks’ lifeline for business still has a catch

Borrowers who defer their loan repayments during the coronavirus crisis will still need to pay back the interest.

Commonwealth Bank CEO Matt Comyn explains for businesses that opt to defer repayments for the next six months, interest will continue to accrue, however they will be able to repay the debt over a longer period.

“There’s a lot of flexibility being offered to customers during this period of time,” he tells Alan Jones, including the waiving of banking point-of-service fees.

Business customers will also be able to borrow up to $10 million in aggregate borrowing, or a $250,000 unsecured loan.

Mr Comyn says the bank will negotiate with customers to find ways to ease the financial burden of loan repayments, including extending mortgages up to their maximum term of 30 years.

“We’re talking here about hundreds of billions of dollars of loans; it’s never in a bank’s interest for a customer to not be able to repay that.”

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