Australia’s banks are doing what the community expects in a time of crisis – stepping up to help our customers through what will be one of the toughest times in their lives.
Small business relief
Australian Banking Association CEO Anna Bligh announced a small business relief package from Australia's banks on Friday the 20th of March.
“This Assistance Package will apply to more than $100bn of existing small business loans and depending on customer take up, could put as much as $8 billion back into the pockets of small businesses as they battle through these difficult times,” Ms Bligh said.
Australia’s banks have extended the six month deferral of loans, building on the ABA’s Small Business Relief Package, to 30,000 more businesses across the country.
This support now covers 98% of all businesses with a loan from an Australian bank.
*For commercial property landlords to be eligible, they must provide an undertaking to the bank that for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears as a result of COVID19
Businesses with total business loan facilities of up to $10 million (up from the $3 million small business threshold) will now be able to defer repayments for loans attached to their business for six months.
Combined with measures already announced, it will mean a six-month deferral of loan payments will apply to up to $250 billion worth of loans, with extra cash available to 425,000 businesses to cope with the crisis during the COVID-19 pandemic.
The Small and Medium Enterprise (SME) Loan Guarantee Scheme will support up to $40 billion of lending to SMEs.
The Scheme will be available for new loans made by participating lenders until 30 September 2020.
Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. Rules of the scheme were finalised yesterday between the ABA, banks and Treasury.
The Australian Banking Association has prepared a quick easy guide for customers during the COVID-19 pandemic. Read these sample questions and more online.
I’ve lost my job, or lost hours, as a result of COVID-19, what type of financial hardship relief are banks offering?
Banks are now offering customers the option to defer home loan repayments for up to six months.Other assistance can include fees waived, loans restructured and further credit offered to get through the pandemic.
If I get a loan holiday, will I be charged interest during this time?
While you won’t have to make any principal or interest payments for the 6 months, interest will continue to be accrued, it can then be paid off over the life of the loan once repayments begin again, or the length of the loan extended. This will be a conversation between you and your bank to determine your preference.
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.
