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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We’re here to support you through the changes. From making the most of the stimulus initiatives, through to managing the risks associated with the impact of the Coronavirus, the Modoras team is here to help you build a resilient business. Make well-informed business decisions; contact us on 1300 888 803 to book a catch up with a Modoras professional.
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