PKO Bank Polski in Poland launched a new loan offer for entrepreneurs called a “Loan with an interest rate not greater than”. The customer has the option to buy protection for the WIBOR 3M reference rate, which is the basis for the loan flexible interest rate. Thanks to this, entrepreneurs will be able to limit the risk of an increase in the interest rate.
„When working on the offer for business customers, we always put the safety of our customers’ finances in the foreground. In recent years, interest rates have been very favorable for loan repayments, but as we can see, the situation is changing now. Therefore, it is worth considering hedging against interest rate risk when the repayment period of the loan is longer than 6 months. In addition to the products used, such as the CAP option, IRS or CIRS contracts, our customers can now purchase reference rate protection” said Agnieszka Wardak, director of the Enterprise Banking Center at PKO Bank Polski.
The offer is addressed to entrepreneurs with revenues up to 30 million PLN (approx. 6 505 376 EUR) per year. The loan amount ranges from 50 000 to 500 000 PLN (approx. 10 842 – 108 422 EUR). The loan can be taken for a maximum of two years at the branches of PKO Bank Polski. Customers of Corporate Banking can sign the contract at the headquarters of their company. The bank provides this group with an advisor service in any place convenient for the entrepreneur. Corporate Banking customers also have at their disposal a team of experts, including credit analysts, experts in leasing, factoring, and international transactions.
How does a loan with interest rate protection work? An example simulation
ABC takes out a loan in the amount of 100 000 PLN (approx. 21 684, EUR) for a year. Loan interesr rate is flexible and consists of WIBOR 3M reference rate + loan margin. On the date of loan agreement signing, WIBOR 3M rate is, for example, 1%. The customer buys protection against its increase till the benchmark to a maximum level of 1.5%. If WIBOR 3M rate increases and will be higher than 1.5%, the customer will pay interest arte of 1.5% + loan margin. If it drops and is lower than 1.5%, e.g. 1.2%, then the customer will pay interest rate of 1.2% + loan margin.
Source: Bank’s Press Release from November 09, 2021