Key to enduring challenging times, like the COVID-19 crisis, is the ability to conserve cash. By preserving business and personal financial viability, you will be far better placed to recover upon the reawakening of the economy, which is inevitable. How can you do that?
As part of a suite of simple measures proposed by our banks, for business and individuals affected by the crisis, you can now:
- Take advantage of reduced interest rates
- Apply for deferral of your principal payments for up to six months, on the reduced interest rates
- Have your overdraft extended, if needed
- Apply for the 50 per cent government guaranteed financial package (worth up to $250,000), if your business can use it productively.
The last thing a business needs at this time, coming into a weaker economy, is to be saddled with more debt and obligations so, when considering these banking measures, ensure you have both:
- Considered the ‘criticalness’ of the debt for survival both during the crisis, and for revival after the crisis, and
- Ensured that the debt can be serviced long term, as part of a viable operation.
By taking advantage of the banks’ support measures, as well as other stimulus measures like JobKeeper payments and the cashflow boosts, businesses should be better placed to hunker down, conserve cash, and defer obligations, until trading can resume.
Here is an overview of the key measures now on offer by Australian banks, with links to their application forms.
The big banks
Commonwealth Bank
- Home loan repayments paused for up to 6 months (optional)
- 1, 2 and 3 year fixed home loan rates reduced by 0.70%
- 12 month term deposits increased to 1.70% p.a.
- Existing cash-linked small business loans reduced by 1.00%
- Business loan rate reduction of 1.00%
- Business customers granted multiple fee waivers
- Automatic enrolment of 76,000 businesses into loan deferral arrangements for up to 6 months.
National Australia Bank
- Home loan repayments paused for up to 6 months (optional)
- 1, 2 and 3 year fixed home loan rates reduced by 0.60%
- 10 month term deposit offering 1.75% p.a introduced
- Variable rates for small business loans reduced by 1.00%
- New loans and all overdrafts on QuickBiz reduced by 2.00%
- Business credit card repayments deferrable
- Business loan repayments deferrable for up to 6 months.
Westpac
- 1, 2 and 3 year fixed home loan rate of 2.29% per annum
- 3-6 month deferral of mortgage repayments for those affected financially by COVID-19
- 12 month term deposit offering 1.70% p.a
- 8 month term deposit offering 2.00% p.a. for Australians aged 65 and over
- 2.00% reduction to overdrafts
- Small business cash-based loans to receive a 1.00% reduction on variable interest rates
- Business loan repayments deferrable for 6 months.
- Variable home loan rates reduced by 0.15%
- 2 year fixed rate home loan rate of 2.19% p.a.
- Loan repayments deferrable for 3-6 months
- Variable interest small business loan rates reduced by 0.25%
- Business loan repayments deferrable for 6 months
- Temporary increases in overdraft facilities for 12 months
- 2.59% p.a. fixed rate secured small business loan for 2 and 3 years introduced (up to $1 million).
Other smaller bank offerings
Suncorp
- Loan repayments deferred
- Rearranging of existing loans
- Including P&I to interest only repayments with the waiver of establishment fees
- Early withdrawal fees waived for customers withdrawing from term deposits and/or Farm Management Deposits
- Working capital assistance.
Bendigo and Adelaide Bank
- Home and business loan payments deferrable for up to 3 months
- Loan restructuring or consolidation fees waivered
- Emergency credit card limit increase
- Reduced interest rates on personal loans (existing customers only)
- Interest rate reductions for early withdrawals on term deposits waived
- Payments and extensions for equipment finance deferred.
Macquarie Bank
- Business and personal loan repayments deferrable for 6 months
- Business loan interest rate reduction by 1.00%
- Smarter Business Loan interest rate reduction by 1.00%
- Variable interest small business loan rates reduced by 0.25%
- Commercial vehicle lending rates reduced by 1.00%.
Useful references:
- Australian Broker: Banks institute range of responses to COVID-19 (external website)
- Macquarie: Comprehensive support package for Australians dealing with coronavirus (COVID-19) (external website)
Contact your local Bentleys advisor for further information. We are doing everything we can to help businesses come out of this challenging time in good shape.
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.
COVID-19: A summary of Australia's tax measures
The governments of Australian states and territories have also released independent stimulus packages. For an overview of all Australian measures, click here.
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