We know times are tough for many businesses right now, and that maintaining cash flow may be difficult as the coronavirus continues to affect the economy.
[The following is content provided by Tony Haworth of AAP Finance Brokers]
Small and medium-sized business customers may be eligible for a fast-tracked application on an unsecured loan of up to $250,000. I have drafted a summary for each major lender who will be assisting in this process and various links to website support if required.
ANZ Support for COVID-19 Affected Businesses
As of today, ANZ have yet to announce their updated business support loan process via the recent government stimulus program. I will update you further when this announcement comes through. In saying this they have outlined the following:
- Decrease variable interest small business loan rates in Australia by 0.25% p.a., effective from 27th March 2020, resulting in a 0.50% p.a. reduction since last week.
- All impacted customers can request a six-month payment deferral on loan repayments for term loans, with interest capitalised.
- Making available temporary increases in overdraft facilities for 12 months.
- A reduction by 0.80% p.a. to a new two (2) and three (3)-year fixed rate of 2.59% p.a. for secured small business loans up to $1 million3, effective 3rd April 2020.
CBA Support for COVID-19 Affected Businesses
There will be no establishment or monthly fees for customers with less than $50m annual turnover, and no repayments required for six months. For the first six months, interest is deferred and capitalised initially at a variable rate of 5.5% p.a., reducing to 4.5% p.a. on 3 April 2020. After six months, principal and interest repayments will be required.
No interest will be payable unless the loan is used.
NAB Support for COVID-19 Affected Businesses
To support businesses in need of a quick cash flow injection to stay open and keep people in jobs, NAB has announced a new Business Support Loan.
The Business Support Loan will enable eligible businesses to apply for a loan of up to $250,000 at 4.5% p.a. from NAB with no repayments required in the first six months. To be eligible, businesses must have an annual turnover of less than $50 million.
The criteria are outlined below:
- Open to new and existing NAB Business customers – new applications only
- Loans must be for business purposes
- Loan term up to three years
- Principal and interest repayments will apply only after an initial six-month repayment holiday
- No application or loan services fees will apply
- Loans will be available up until 30 September 2020
Westpac Support for COVID-19 Affected Businesses
To provide further financial support for home lending, savings and small business customers, Westpac will introduce the following changes:
- To support the cashflow needs of our small business customers, overdrafts will be reduced by 200 basis points for new and existing customers, effective Monday 6 April 2020.
- 100 basis point reduction to variable interest rates on small business cash-based loans, effective Monday 6 April 2020.
- A 2.29% p.a. fixed rate home loan for one, two and three years for owner occupied customers on principal and interest repayments with a Premier Advantage Package, effective Friday 27 March.
- Special 12-month term deposit of 1.7% p.a. to provide customers a higher return on their savings, an increase of 70 basis points (up to $500,000 per customer). For Australians aged 65 years and over the rate will be 2% p.a. for eight months (up to $500,000 per customer). Effective Friday 27 March 2020.
- 200 basis point reduction on overdrafts for new and existing customers.
- 100 basis point interest rate reduction for small business cash-based loans.
- Small business customers having cash flow issues can defer principal and interest repayments of business term loans for six months:
- Merchant terminal rental fee waivers for up to three months.
- Helping small and medium businesses take advantage of the increased instant asset write-off and accelerated depreciation provisions in the Federal Government stimulus package with no establishment fees for equipment finance loans until the end of June 2020.
I have also included a Westpac initiated Business Continuity Plan for any one who is looking to reset their businesses and trade through this crisis.