CBA tightens lending to planners
The Commonwealth Bank of Australia (CBA) has tightened its lending criteria for financial planning businesses.
A spokesperson for CBA confirmed the bank was reviewing its lending terms for advice businesses, with the changes intended to bring its “lending approach to financial planners in line with the broader business lending practices of the organisation”.
The spokesperson said the terms offered to financial planning practices as it sought to acquire new business in the space had been “very attractive”. While that strategy had proved successful, the spokesperson said CBA now needed to ensure it was “consistent in the way we lend money”.
The spokesperson said the bank would continue to support financial planners, “but we’ll be looking at some of their submissions for credit in a different way”. CBA will be examining new applications, as well as rollovers, restructures and increases to existing facilities under the new terms.
The spokesperson said he wasn’t aware of industries other than financial planning being reviewed.
CBA launched its financial planning banking division in October 2007, describing it as a specialist division to service Australia's “burgeoning $6 billion financial planning industry” and one that would reflect the “unique requirements of this sector”.
CBA said it would offer certain groups access to “the highest levels of gearing in the market to facilitate succession planning strategies and acquisitions”.
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