The Australian Banking Association (ABA) has announced a small business relief package
The unprecedented and strict measures put in place by the government to stop the spread of the virus will have a devastating impact on many small businesses, as well as on the Australian economy as a whole.
The ABA’s relief package has four potential forms of assistance over the next six months:
1) a deferral of scheduled loan repayments,
2) the waiving of loan fees and charges,
3) the possibility of an interest-free period and a commitment to no interest-rate increases, and
4) enhanced debt consolidation measures to help small business owners make their loan repayments more affordable.
Your eligibility for any of these types of financial assistance will depend on the financial circumstances of your business.
The government has also announced that it will provide funding to support additional lending to small businesses to help them get through this challenging time. The Coronavirus SME Guarantee Scheme will provide lenders with a government guarantee of 50% of the value of new loans issued to SMEs up until 30 September 2020. This initiative should make it easier for SME’s to get finance if necessary to help with their cash flow.
Home loan customers at many financial institutions are also eligible for a freeze on their home loan repayments during this difficult time. The policies of different lenders vary, but the big 4 (NAB, Commonwealth, ANZ and Westpac) are offering their home loan customers the opportunity to defer their repayments for six months.
If your home loan is with another lender and you’re experiencing financial difficulty, you should contact them as soon as possible.
It’s important to understand that you are likely to still be charged interest by your small business or home loan provider even if they don’t require you to make your repayments for the next six months.
You should check if that’s the case with your lender (and the associated financial implications) before taking up any offer. That’s because if they keep charging you interest while you don’t make any repayments, your overall debt will increase.
Making the right financial decision for your small business or home loan is crucial. Freezing your repayments may be your only option to avoid losing your business, your house (or both).
If your business or individual finances have been negatively affected by the coronavirus crisis measures, talk to us at ARG Finance. Our experienced team of finance and mortgage brokers can help you to make the right decision in these challenging times. We’ll also be able to help you if you’re thinking of sourcing additional finance to help you get through this tough period.
We’ll take the time to understand your financial circumstances before providing you with advice. It’s just as important to take care of your financial health as it is to take care of your physical health.
Contact us today to find out how we can help you!
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.