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Insights

July 10, 2020

Banks Announce Extended Deferrals on Business Loans

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James Morris
Banks Announce Extended Deferrals on Business Loans

The Australian Banking Association (ABA) has announced that Australian banks will extend the deferral of business loans for customers who are still in financial difficulty due to COVID-19. What a relief for many business owners trying to keep afloat through the pandemic.

The Association and confirmed that Customers will be contacted by their bank towards the end of their loan deferral period, to discuss a possible return to payments through a restructure or variation to their loan.

If arrangements have not been made by the end of an original six month deferral period, businesses may be eligible for an extension of the deferral for up to four months.

This deferral extension will not be automatic, and will only be provided to those who genuinely require the additional support.

As lending and cash flow differs across each business, the ABA recommends that business owners contact their bank to find the best option for them.

Restructuring or varying a loan may include:

  • Extending the length of the loan;
  • Converting to interest-only payments for a period of time;
  • Consolidating debt; and
  • A combination of the above or other measures

If at the end of the extended deferral period, the business is still severely affect financially,  business owners are encouraged to ask the bank for assistance via the hardship process. Where banks will be in a position to work with the customer to determine a long term solution.

Credit reports will not be impacted, providing the new repayment arrangements are met.

How can we help?

Don’t go it alone, talk to a Modoras Accountant about the stimulus package and support options for your business. Book an appointment today.

Want to know more?

As Government stimulus measures are frequently changing, we are continually updating and creating new tools and information for you. To review the latest materials on COVID-19, please click here. This page will be regularly updated, so please check back in from time to time.

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Modoras remainds committed for your peace of mind. If you have questions on how to make the most of stimulus initiatives or ensuring your business thrives in the post-COVID environment, contact us on 1300 888 803 to book a catch up with a Modoras professional.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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