Banks provide Small Business Relief Package

Over the last few days banks have worked closely with Treasurer and the Government to identify measures to support the economy through this crisis.

The message from the Australian Banking Association is “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 have started rolling out in full this week.

Measures that we are seeing being implemented by the major banks include:

• Reduced interest rates on overdrafts and small business cash-based loans
• Up to 6 month deferral of repayments on business loans and equipment finance. At the end of this     deferral period, in some cases repayments will need to be caught up with a     lump sum repayment in the 7th month, in others principal     repayments are payable at the end of the term of the loan (principal     repayments recommence in the 7th month however the deferred     principal amount is not due until the end of the term of the loan)
• Additional unsecured lending products being made available to business customers with interest capitalised at the end of the 6 month period
• The option to make interest only repayments
• Special arrangements in relation to arrears
• Early access to Term Deposit funds with waiver of redemption fees

Banks appear to be assessing these requests for support on a case by case basis, but we expect there will be an application process based on your businesses circumstances and effects being experienced.

Many of the relief options are based around the next 6 months, with this time period potentially being triggered when you seek the advice. So the challenge for business is to not trigger these time frames too early before they really need the support, but not too late so that the effects of the relief are all too late.

So if your bank is not already talking to you about these options, particularly in those industries with immediate cash flow impacts from recent Government policy decisions, we suggest you get in contact with your bank to discuss the above options and how they can help.

‍