Major Australian banks have announced new support measures to help businesses and individuals affected by the extended COVID-19 lockdown in Sydney and other sudden closures and travel restrictions across the country.
- Australian Banking Association 22 Members Offer New COVID Support to Small Businesses and Home Loan Clients
- Small businesses can request a three-month loan deferral, mortgage customers can request a month-to-month stay
- Business groups hailed the move, but warn members to seek advice if they plan to defer and extend their loans
With restrictions tightened on what type of shopping is considered “essential” to leave the home, more retailers are likely to join the ranks of hospitality and personal services businesses already closed or heavily affected by the lockdown.
Even before these tightened restrictions were announced, the Australian Banking Association (ABA) said its members, including the Big Four banks, would offer new support to customers struggling with the brunt of foreclosure restrictions.
The ABA stressed that these measures would be available to all small business and home loan clients heavily impacted by current lockdowns or recovering from recent lockdowns, regardless of location and industry.
What financial support is offered?
Small businesses – with debts of less than $ 3 million and revenue of less than $ 5 million – can request repayment deferrals of up to three months, with the deferral period added at the end of the ready.
The loan must not have been in arrears before the last COVID impact, unless the customer was already on a payment schedule agreed with their bank.
Small businesses could also request reimbursement of their merchant terminal fees for up to three months and fee waivers on cash deposits and farm management deposit accounts for the same period.
Professional clients as well as individuals can also ask their bank for a deferred repayment of their mortgage.
Unlike last year’s global loan deferral offer, this would be evaluated month by month between the customer and the bank.
“Customers can rest assured that if they need help, they will get it,” said Anna Bligh, Executive Director of ABA.
“The banks are also ready to support big companies and they will be assessed on a case by case basis.
How to access banking support?
Ms Bligh said customers should act quickly if they are having difficulty.
“Customers who need help should contact their bank,” she said.
ABA represents 22 banks, including the four large regional and mid-sized banks, as well as foreign institutions licensed in Australia.
Commonwealth Bank Managing Director Matt Comyn is currently Chairman of the Board of the ABA.
He said the ABC will proactively contact eligible businesses early next week to offer them a loan deferral through an online application process.
“The pandemic continues to impact businesses across Australia, with small businesses in particular facing cash flow challenges due to blockages and travel restrictions,” Mr. Comyn observed.
Westpac chief executive Peter King said his bank was preparing for an increase in support requests.
“We see the need for immediate support for small business owners who face issues of reduced commerce, cash flow and foot traffic as more people stay at home, especially in areas with lockdown restrictions like Greater Sydney, ”he noted.
“We have increased our support to reflect the longer term impact of COVID-19 and have a dedicated team of bankers available to help tailor this assistance to the personal circumstances of our clients. “
What do small businesses think?
Alexi Boyd is the Acting Managing Director of the Council of Small Business Organizations Australia (COSBOA), a leading lobby group for the industry.
After discussing the latest developments with a representative sample of its members, she welcomed the banks’ decision.
“Anything that anyone can offer right now is welcomed by small businesses,” she said.
“It’s great to see the ABA take center stage.”
New South Wales Treasurer Dominic Perrottet also welcomed the move, following the state government’s recently announced business support program.
Ms Boyd added that banks had recently spoken to small business clients to get a feel for how they were affected, and it appeared to show up in the aid announcement.
However, she said banks still have work to do to communicate what’s on offer to many of their customers.
“It is therefore important that banks provide clear and precise information.”
Ms Boyd said small business owners should also seriously consider seeking independent financial advice on how any postponement and extension of their loan could affect their operations and plans, especially given the increased fees. of future interest.
She would like the National Cabinet to also take the lead in agreeing on national standards for locking and closing borders so that businesses have more certainty about what is likely to happen and can prepare for it. .
“It is nothing short of devastating,” Ms Boyd said of the current Sydney lockdown.
“We have to be guided by the medical experts, but small businesses bear the cost, both financially and in terms of mental health.”