Two weeks back, the Australian Banking Association (ABA) announced that if your small business was being affected by the coronavirus, your loan repayments would be deferred for six months.
They’ve since extended this support to businesses with loans of up to $10 million (up from the $3 million), which is expected to directly benefit a further 30,000 businesses across the country.
Now, on the face of it, it may seem like this loan deferral extension is good news for the bigger end of town.
But it comes attached with conditions that will help out small business owners across the country too, as it covers 90% of commercial property owners who have loans with an Australian bank.
“The type of businesses this applies to includes commercial landlords of properties such as local shopping centres, pubs, clubs and restaurants, who must agree not to terminate leases or evict current tenants for rent arrears due to COVID19 in order to access support,” says ABA CEO Anna Bligh.
Basically, the conditions have been designed to encourage landlords to support their tenants.
“Where landlords within this threshold do the right thing by their tenants, banks will do the right thing by them,” explains Bligh.
The new measures will apply in all sectors of the economy, on an opt-in basis, under the conditions that:
– commercial property landlords must provide an undertaking to the bank that for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears as a result of COVID19
– the customer has advised that its business is affected by COVID-19
– the customer was current in terms of existing facilities 90 days prior to applying
– interest is capitalised, meaning either the term of the loan is extended or payments are increased after the deferral period.
Businesses with total loans of more than $10 million may also be eligible for relief, but this will be considered on a case by case basis.
It’s important to note that this isn’t the only assistance package that’s been made available to businesses since the coronavirus outbreak started impacting the Australian economy.
For example, the federal government’s instant asset write-off scheme’s threshold has increased from $30,000 to $150,000, and each lender has their own specific support packages available.
So if you’re a business owner – big or small – who would like to explore the options available to you then please get in touch. We’re here to help you any way we can.
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