The financial contagion of the COVID-19 pandemic is expected to reach every business and every household. No one will be immune. Business banking units across all major banks have pivoted to engineer their own COVID-19 economic response to help businesses stay open or re-open in time.
No doubt it’s an ever-changing landscape and packages could change. Here’s what we can gather so far:
The Australian Banking Association advises people or businesses in distress to contact their bank’s financial hardship team.
Banks are providing assistance in relation to the following:
- Deferring loan payments
- Waiving fees and charges
- Consolidation of debts
- Easier access to term deposits
- Deferring credit card payments and increasing limits
The Australian Banking Association has provided the following contact details for banks:
|AMP||1300 130 191||Experiencing financial hardship|
|ANZ||1800 252 845||Customer Connect|
|Arab Bank||1800 64 64 84||Hardship Assistance|
|Bank Australia||132 888||Contact Us|
|Bank of Sydney||13 95 00||Financial Hardship|
|BOQ||1800 079 866||Financial Hardship Assistance|
|BankSA||1800 679 461||BankSA Assist|
|Bankwest||1300 769 173||Experiencing financial hardship|
|Bendigo and Adelaide Bank||1300 652 146||Financial difficulty assistance|
|Citibank||1800 722 879||Hardship assistance|
|Commonwealth Bank||1300 720 814||Emergency assistance|
|HSBC||1300 555 988||Financial difficulty|
|ING||1300 349 166||Financial Hardship|
|Macquarie Bank||1300 363 330||Financial Hardship|
|ME Bank||1300 500 520||ME Bank financial hardship|
|MyState||13 800 1||MyState financial hardship|
|NAB||1800 701 599||Financial Hardship|
|Rabobank||1800 025 484||Financial Hardship|
|Rural Bank||1800 660 115||Financial Hardship|
|St. George Bank||1800 629 795||St. George Assist|
|Suncorp Bank||1800 225 223||Suncorp Customer Assist|
|Westpac||132 142||Westpac assist|
Banks to defer small business loan repayments
On 20 March 2020, Australian Banking Association CEO Anna Bligh announced a small business relief package on behalf of Australia’s banks.
Describing it as “a lifeline for small businesses when they need it most”, Ms Bligh urged small businesses to contact their bank to apply.
COVID-19 support from the major banks for small and medium businesses
The big four banks have all announced their current COVID-19 response support for business customers.
- Decrease variable interest small business loan rates in Australia by 0.25%pa, effective from 27 March 2020.
- All impacted customers can request a six-month payment deferral on loan repayments for term loans, with interest capitalised.
- Making available temporary increases in overdraft facilities for 12 months.
- A reduction by 0.80%pa to a new two and three-year fixed rate of 2.59%pa for secured small business loans up to $1 million, effective 3 April 2020.
Commonwealth Bank of Australia
- Reduced rates on business loans by 25 basis points.
- Faster decision times for small business loans.
- Deferring repayments and waiving fees.
- Deferring repayments on a variety of business loan and overdraft products, for 90 days.
- Waiving merchant terminal fees for impacted customers with CBA payment terminals, for 90 days.
- Waiving early redraw fees on business term deposit accounts (including Farm Management Deposit accounts).
- Waiving establishment fees and excess interest on Temporary Excess products.
- Deferring repayments on vehicle and equipment finance loans, and providing tailored restructuring options that meet individual customer needs.
Commonwealth Bank of Australia has also committed to paying its Australian suppliers faster.
- Defer principal and interest for up to six months on a range of business loans, including floating and variable rates and equipment finance loans.
- Reduction on variable rates for small business loans by 100 basis points, from 30 March 2020.
- Receive a 200-basis point rate cut on QuickBiz loans and overdrafts from 30 March 2020.
- Pause business credit card repayments for up to six months (including a three-month checkpoint).
- 200 basis point reduction on overdrafts for new and existing customers from 6 April 2020.
- 100 basis point Interest rate reduction for small business cash-based loans, from 6 April 2020.
- Waiving merchant terminal rental fee for three months.
- No establishment fees for equipment finance loans until the end of June 2020.
- Eligible Westpac small business customers who need help to manage their cashflow can defer principal and interest payments of business term loans (excluding credit cards, overdrafts, cashflow/invoice/trade finance, commercial bills), equipment finance facilities and equipment loans for six months.
Eligibility criteria apply.
Coronavirus SME guarantee scheme
The Australian Government recently announced the Coronavirus SME Guarantee Scheme to support the flow of credit in the Australian economy, especially for small and medium enterprises (SMEs).
The Scheme is designed to help SMEs access additional working capital funding from lenders.The Government will provide eligible lenders a guarantee of 50 percent on new unsecured loans made by SMEs. The following criteria apply:
- Maximum total size of loans of $250,000 per borrower.
- The loans will be up to three years, with an initial six month hold on repayments.
- The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
- SMEs with a turnover of up to $50 million will be eligible to receive these loans.
- Loans will be subject to lenders’ credit assessment processes in the context of the uncertainty of the current economic conditions.
Lenders are currently assessing their facilities and are expected to announce further details soon on how business customers can apply for a new unsecured business loan.
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
ezycollect’s Business Support Program is helping SMEs survive this critical COVID-19 period.