The Banking Relief package includes a deferral of principal and interest repayments for all term loans and retail loans for up to 6 months, for small business customers with less than $3 million in total debt owed to credit providers. Importantly, this does not mean that individual banks can’t decide to offer more favourable and tailored terms to their small business customers experiencing financial hardship during these times.
If your ability to work or your business operations have been affected by the virus outbreak, here’s a snapshot of how some major banks could help ease the financial burden. We’ve also found the best way to contact your bank and get the ball rolling for those doing it tough.
ANZ’s assistance options currently focus on their business and home loan customers, but they’re also ensuring all other retail customers can access all their accounts digitally to support social distancing. Business banking customers can expect:
- A six-month payment deferral on loan repayments for term loans, with interest capitalised
- Temporary increases in overdraft facilities for 12 months
- A 0.25% p.a. decrease in variable interest small business loan rates effective from 27 March, resulting in a 0.50% reduction in March
- A 0.80% p.a. reduction to a new two and three-year fixed rate of 2.59% for secured small business loans up to $1 million, effective 3 April
Home loan customers are being offered:
- Decreased variable interest home loan rates by 0.15% effective from 27 March
- A two-year fixed rate of 2.19% p.a. for owner occupiers paying principal and interest
- Home loan payment deferrals for up to 6 months (reviewed at 3 months)
CommBank have extensive options set up for their business customers and are assisting other customers on a case-by-case basis for home loan, credit card and personal loan repayments. The bank will also be adding additional resources and extended hours. Other business support includes:
- Deferring repayments and fee waivers for various products (including repayments on business loans and overdrafts for 90 days)
- Waiving merchant terminal fees for 90 days
- Deferring repayments on vehicle and equipment finance loans, and tailoring restructuring options
- Waiving early redraw fees on business term deposit accounts (including Farm Management Deposit accounts)
- Waiving establishment fees and excess interest on temporary excess products
NAB also has a primary business customer focus, early on announcing measures to support these customers as tourism and regular spending screeches to a halt and cash-flow hits a wall. These include:
- Deferral of business loan repayments and extension of business loan terms (both up to 3 months), based on individual circumstances
- Support to restructure existing business loans, including equipment finance
- Business credit card deferred repayments.
Westpac home loan customers can access a three-month deferral on their loan, with the option to extend to another three months on a review-basis after that period. There are also special 12-month term deposit rates and reduced fixed home loan rates available from March 27. Business customers at Westpac will have a range of support measures to consider in the wake of Coronavirus, including:
- Fee-free redraws on loans
- Business loan and credit card repayments deferred by up to 3 months
- Options to extend business loan terms by up to 3 months
- Restructuring and consolidating loans
- Access to term deposit funds without reduction in interest rates
- Overdraft reduction by 200 basis points effective 6 April
- 100 basis point interest rate reduction for small business cash-based loans
- Access to business finance counselling
St George have announced the following:
- 400 basis points reduction on unsecured lending
- 200 basis points reduction on overdrafts
- 100 basis points rate reduction for small business cash-based loans
- Repayment relief for small business customers
- Unsecured three-year term loan up to $250,000
Suncorp will be easing the financial strain on customers during the pandemic, offering support measures for all customers, particularly small businesses who have been hit hard by the current working and trading conditions.
Customers have the opportunity to defer scheduled loan repayments, rearrange loans without establishment fees (perhaps moving from principal plus interest on their repayments to solely interest when income is uncertain), and withdraw early from term deposits without fees. Businesses will be able to do the same for farm management deposits, and also receive working capital assistance. Neither customer type will see interest rates increase.
Bendigo and Adelaide Bank
Similarly, this bank group has put an assistance package in place across the nation for small business and agribusinesses, as well as consumer customers.
There’s a central focus on loans, with relief on repaying home loan and business loans for up to three months, and a waiver of fees for restructuring and consolidating loans, as well as Bendigo Bank customers getting a discounted interest rate on new loans. Existing credit card holders can apply for an emergency limit increase, while those looking to withdraw their nest egg early from a term deposit won’t see an interest rate reduction. Repayment on equipment financing will be considered for deferral or extension on a case-by-case basis.
Any banking customers here can apply for assistance if COVID-19 has impacted their financial situation due to illness or inability to work. On a case-by-case basis, Bank of Australia is offering deferrals of scheduled loan repayments, fee waivers, interest-free periods or no interest rate increases, and debt consolidation to help make repayments more manageable.
Macquarie Bank are going in with a tailored approach across their customer base, offering things like credit card interest rate reductions, special services for those in extreme financial situations, and loan restructuring and reassessment for business clients. They suggest personal banking customers use their banking app for convenience in lodging requests, and investigate the bank’s approach to financial assistance.
What if my bank isn’t on this list?
Not every institution will have a specific COVID-19 financial assistance package or initiative prepared. However, most will have standard policies for providing support during financial hardship caused by illness, injury or other scenarios impacting customers’ ability to work. We believe that the banks will continually update their policies in how they will help their customers. Our view is to be in touch with your bank as soon as possible to discuss what options exist.