The Australian Banking Association (ABA) has released a statement advising that Australian banks will defer loan repayments for 98% of all businesses (including sole traders) affected by COVID-19 for 6 months. The ABA has advised that customers will self-assess whether their business has been adversely affected and no other verification is required.
Your business will qualify if it has loan facilities up to $10 million (interest will capitalise on the loan) and it has been economically affected by coronavirus. You should contact your bank online as soon as possible as they have hardship teams established to assist businesses.
Summary of assistance that can be provided:
- A deferral of scheduled loan repayments
- Waiving fees and charges
- Interest-free periods or no interest rate increases
- Debt consolidation to help make repayments more manageable
Several commonly asked questions:
- Can your business still borrow?
Banks are offering loans at low interest rates supported by the Government’s Loan Guarantee. Businesses will still need to satisfy the bank’s lending criteria.
- Assistance with mortgages, credit cards and home loans
Many banks have announced assistance for customers so you should contact your bank directly.
- Breaches of loan terms and conditions
Banks have agreed not to enforce business loans for non-financial breaches of the loan contract (e.g. changes in valuations).
Further information as announced by the ABA can be found here.