Australian banks will defer loan repayments for small businesses affected by COVID-19 for six months. Australian banks have hardship teams ready to help whether you’re dealing with the impact of the COVID-19 pandemic, drought, bushfire or flood, there are practical ways your bank can help depending on individual circumstances. If the coronavirus pandemic has impacted your small business, contact your bank online today.
Assistance can include:
- A deferral of schedule loan repayments
- Waiving fees and charges
- Interest free periods or no interest rate increases
- Debt consolidation to help make repayments more manageable
Here are FAQs for small business relief impacted by COVID-19:
1. Who is the small business relief package available to?
The small business package is available to current small business customers of participating banks where you advise your bank your business is affected by COVID-19. You apply to your bank for the deferral and a fast track approval process will provide support as soon as possible.
2. How can my banks help me exactly?
Australian banks will defer loan repayments for six months for small businesses who need assistance because of COVID-19.
They are also offering loans, including overdrafts, with no repayments for the first six months, at very low interest rates, supported by the Government, through an SME Loan guarantee.
Other assistance can include fees waived, loans restructured, and further credit offered to get through the pandemic.
3. Does this apply to sole traders?
Yes, it applies to all current small business operators.
4. How do I get the assistance?
Contact your bank to opt in. A fast track approval process will provide support as soon as possible.
5. What is the definition of a small business?
Contact your bank for eligibility criteria.
6. Can a business borrow money at this time?
Yes. Banks are offering loans at very low interest rates, supported by the Government, through an SME Loan guarantee. Your business would still need to meet certain lending criteria set out by your bank.
7. What evidence will I need to prove I’ve been impacted by COVID-19?
Customers will self-assess whether their business has been adversely impacted, no further verification will be required.
8. Can I get help with my mortgage?
Yes. Some banks are now offering customers the option to defer home loan repayments for up to six months.
9. Can I get help with a credit card or personal loan?
If you have been impacted by COVID-19 and are experiencing hardship, contact your bank. Assistance can include waiving fees, restructuring loans or other things to help get you through the pandemic. Check your banks website under ‘Hardship’.
10. If I defer my repayments, will it affect my credit ratings?
Banks are required to report your repayment history to credit bureaus. Any change to your loan structure or repayments may be recorded on your credit history, but banks and credit bureaus are working together to ensure that reporting is fair to customers and takes Covid-19 into account.
11. I’m nervous about telling my bank I’m in trouble.
Your bank wants to partner with you through this difficult time. Getting people back to work and keeping them in their homes is what is in the best interests of all Australians.
Many banks are contacting their customers directly to see what help they may need.
However, if you are worried, it’s very important that you contact your bank as soon as possible. The earlier you contact your bank the more assistance they will be able to provide.
12. How are Australian banks helping larger businesses?
Businesses with total business loan facilities of up to $10 million (up from the $3 million small business threshold) will also be able to defer business loan repayments for six months.
These businesses are generally much larger and employ a greater number of people. Support now extends to 98% of all businesses with a loan from an Australian bank.
Banks are also taking a more flexible approach to other loan terms and conditions. During this period banks have also agreed to not enforce business loans for non-financial breaches of the loan contract (such as changes in valuations).
This extension of bank support to larger businesses will apply to an additional $100 billion of business loans.
Combined with measures already announced, it will mean a six-month deferral of loan payments for approximately $250 billion worth of loans, freeing up vital cash for hundreds of thousands of Australian businesses to help get them through the COVID-19 pandemic.
13. I’m a commercial property landlord, can I get help from my bank?
Yes, commercial property landlords can get relief as long as you provide an undertaking to the bank that for the period of the interest capitalisation, you will not terminate leases or evict current tenants for rent arrears as a result of COVID19.
Source: Australian Banking Association
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