Help our Businesses Create or Save Jobs

Tuesday, 24 February 2009, 3:39 pm
Press Release: ASB Bank

Join ASB in Helping our Businesses to Create or Save Jobs

ASB has created a special $1 billion loan fund for New Zealand businesses to borrow at below market rates if they can demonstrate the loans will create employment, or prevent people losing their jobs.

At the same time, New Zealanders will be given the opportunity to share in this job creation initiative by depositing funds with ASB in a special Job Creation Term Deposit. The interest rate on the loans and the term deposit will be reviewed weekly, but will always be the same. The rate will be fixed at the time of approval and will apply for a 2 year term.

The opening interest rate for the Job Creation Loans is 5% per annum, which is 0.95% per annum below ASB’s current two-year fixed housing rate.

To be eligible for the loans, borrowers will need to meet ASB's normal business lending criteria plus demonstrate the employment benefits of their proposal.

“The focus of the lending pool is to assist businesses to take advantage of opportunities to create new jobs, or to prevent a business having to cut jobs,” said ASB’s CEO, Charles Pink.

“These loans will be going out at the lowest interest rates offered to businesses in recent times. It is our practical contribution to saving jobs in an unprecedented economic environment.

“If a business is prepared to invest in its future, and create or protect employment, then ASB is saying it is prepared to back them with an attractive lending rate.

“We also know that many of our customers would like to be involved in helping New Zealand during this challenging time. That is why we’re launching the Job Creation Term Deposit at the same time and at the same interest rate as the Job Creation Loans. For 2 year term deposits from $5,000 up to $5 million our customers will receive a very competitive interest rate - currently 5% per annum paid quarterly – while ASB covers the costs and risks of the loans. Together we hope to make a difference by keeping more people in work.”

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Loans made from the $1B pool will be available only to existing businesses for new lending. Both current ASB business customers and new customers can apply. The loans are for a minimum of $100,000 and a maximum of $10 million and will need to be fully drawn down within 60 days of being approved. Applications to refinance existing borrowings will not qualify for a Job Creation Loan.

Applications for both the Job Creation Loans and the Job Creation Term Deposits will open on Monday, 2 March. ASB will separately account for this pool of lending funds and will report publicly on progress in terms of loans extended and jobs saved.

“These loans are specifically aimed at businesses looking to invest in a new project, process or expansion initiative. Provided the business case for new lending stacks up, and will result in additional people being employed, or stop existing employees losing their jobs, we will consider it,” said Mr Pink.

“A low interest rate and certainty around interest payments for the next two years might just be the factor that a business needs in this environment to decide an opportunity is a ‘go’.”

Mr Pink said the Job Creation Loans will not affect the availability of lending funds for ASB’s customers generally.

ASB Bank Limited's current Disclosure Statement and investment statement for Term Deposits are available free of charge from any branch of ASB.

ENDS

ASB Bank

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