There is a range of measures that have been announced to support businesses through the crisis. The Prime Minister says the banks must play their part. In this Covid-19 business support blogpost, Jennifer Lawrence, Senior Adviser Industry Policy sheds some light on how your bank can help.
Defer your loan repayments
98% of businesses affected by COVID-19 are eligible to defer their loan repayments for six months.
The business relief package is available to business banking customers of participating banks with total business loan facilities of up to $10 million.
To access this relief, you will need to contact your bank to check if they are participating and to advise that your business is affected by COVID-19. You self-assess if your business has been adversely impacted by COVID-19, according to the Australian Banking Association no further verification will be required.
Top tip: While you’re in contact with your bank, check what other assistance may be available. You might be able to have fees waived, loans restructured, or additional credit made available. You may also be able to defer payments on other loans such as your mortgage or personal loans.
- For more information visit the COVID page on the Australian Banking Association website.
Small business loan guarantee
The government is supporting small business access to credit. Under the Coronavirus SME Guarantee Scheme, the government will provide a guarantee of 50 per cent to small and medium enterprise lenders for new unsecured loans to be used as working capital for businesses with a turnover up to $50 million.
This will mean lenders are more willing to provide credit and small businesses will have easier access to the additional funds they need to support them through the challenging and uncertain months ahead.
Businesses will be able to apply for unsecured loans of up to $250,000 from early April until 30 September 2020. The loans will be for up to three years and have an initial six month repayment holiday.
In addition, the government is providing small business lenders an exemption to the responsible lending obligations for six months for any credit relating to business purposes. These obligations do not apply to business lending; however, it can take time for lenders to make sure the money borrowed meets this test. This exemption will help businesses access credit quickly and efficiently.
- For more information visit the Supporting the flow of credit page on Business.gov.au.