COVID-19: Banking and finance measures

The big banks and the Australian Government have made some key announcements, in response to the escalating COVID-19 (Coronavirus) crisis.

Here, we outline the key finance and banking initiatives proposed to help business and individuals through this unsettling time.

We’ll update this page as more details are shared.

 

Loan repayments on hold for six months

The banks and the many of the second-tier lenders have announced that they will be offering their clients six months deferment on existing business and home lending facilities.

Coronavirus SME guarantee scheme

The Coronavirus SME Guarantee Scheme will provide support for these businesses. Under the scheme, the Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months.

SMEs with a turnover of up to $50 million will be eligible to receive these loans.

The Government will provide eligible lenders with a guarantee for loans with the following terms:

  • Maximum total size of loans of $250,000 per borrower
  • The loans will be up to three years, with an initial six-month repayment holiday
  • 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.

Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

As part of the loan products available, the Government will encourage lenders to provide facilities to SMEs that only have to be drawn if needed by the SME. This will mean that the SME will only incur interest on the amount they draw down. If they do not draw down any funds from the facility, no interest will be charged, but they will retain the flexibility to draw down in the future should they need to.

This initiative will commence in early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

Land tax deferral

Landowners due to pay 2020 land tax, who have at least one non-residential property and total taxable landholdings below $1 million, have the option of deferring their 2020 land tax payment until after 31 December 2020.

The State Revenue Office will contact all taxpayers who are eligible for this deferral.

Boosted instant asset write-off

Businesses with a turnover of less than $500 million are eligible for an expanded instant asset write-off for asset investments of up to $150,000. The threshold applies on per asset basis, so businesses can immediately write-off multiple assets. This proposal applies from announcement until 30 June 2020, for new or second-hand assets first used or installed use in this time frame.

If you have questions, please contact your local Bentleys Finance Adviser and/or Lender.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

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