Loan Deferrals for Small Business
In a bid to do their part to keep Australian businesses alive during tough times, the Australian Banking Association has rolled out a small business relief package to ease the burden of reduced revenue.
The measure has provided an opportunity for small businesses to apply for a loan repayment deferral for up to 6 months. Banks have also sought to reduce interest rates on business loans and have enabled access to term deposits without break fees.
The Assistance Package may apply to more than 100 billion small business loans, injecting an estimated $8 billion into the pockets of small businesses struggling the most.
What about the interest?
Although this short-term relief will support Australian small businesses, there is long term ramifications of loan deferment. Interest will still accrue on loans during the deferment period. With interest being applied on the existing capital and unpaid interest, loan terms and repayments may be impacted. Please check with your bank as to how interest deferred will be capitalised.
See the below graphs for an example on how loan deferment may impact a loan long term:
How do I apply?
Each bank will have its own conditions and application method, with some accepting applications online. Links to the major bank sites on this topic are below:
NAB – Coronavirus Contact Form
ANZ – Covid-19 Request a Call
Commonwealth – Coronavirus Business Support
St George – Defer Business Loan Payments Form
ING – Coronavirus Update
Heritage – Response to Covid-19
Suncorp – Coronavirus Support Contact Form
Westpac – Small Business Relief
Want to know more?
We are constantly updating our tools and information relating to Government stimulus measures and other announcements. Please click hereto view the collection of materials.
Below are some articles that may interest you:
- JobKeeper Payment: Relief for Employers and Employees
- Are you entitled to the Federal Government Stimulus Package
- Government Stimulus Package for Business
- Government Stimulus Package for Individuals
- Australian Tax Office Relief
Have you got questions on how stimulus packages might affect your business, or how to help ensure your business makes it through difficult economic times, we’re here for you. Contact us on 1300 888 803 to book a catch up with a Modoras professional.
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