No Loan Repayments For Small Business For Six Months
Small businesses hit by COVID-19 will be given a six-month deferral on loan repayments.
AMP Bank, ANZ, Bank Australia, Bank of Queensland Limited, Bendigo and Adelaide Bank Limited, Commonwealth Bank of Australia, HSBC, Macquarie Bank, National Australia Bank, Suncorp Bank, and Westpac are all participating in the small business relief package, which applies to term and retail loans for small businesses with less than $3 million in total debt owed to credit providers. At the end of the six-month period, customers will not have to pay the deferred loan interest in a lump sum; instead, the length of the loan or subsequent repayments will be increased.
The move by the banks could put as much as $8 billion back into the pockets of small business owners, said Anna Bligh, CEO of the Australian Banking Association, and will apply to more than $100 billion of existing small business loans.
“This is a multi-billion-dollar lifeline for small businesses when they need it most, to help keep the doors open and keep people in jobs.
“Banks are putting in place a fast track approval process to ensure customers receive support as soon as possible,” she said.
According to Ms Bligh, the banks have been working closely over the past several days with government and Treasury to identify ways to support the economy during the coronavirus pandemic.
“Small businesses are the most vulnerable part of the economy and have the most urgent need for assistance. Small businesses employ 5 million Australians and this package is designed to help them keep doing just that.
“Small businesses can rest assured that if they need help, they will get it. Banks are already reaching out to their customers to offer assistance and packages will start rolling out in full on Monday,” she said.
The ACCC has already greenlit the plan, with chairman Rod Sims saying the consumer watchdog recognises the “significant financial hardship” that COVID-19 has caused for small business owners and their staff.
“We recognise the urgency of this issue. We consider that this relief package will enable banks to quickly provide relief to impacted businesses, and allow them to keep employing their staff.
“Importantly, interim authorisation does not mean that individual banks can’t decide to offer more favourable and tailored terms to their small business customers experiencing financial hardship during these times,” he said.
Customers who have not already been contacted are being advised to get in touch with their banks to apply.