Small businesses affected by lockdowns should soon be able to access three-month loan repayment deferrals after the Australian Banking Association (ABA) announced a national support package.
The ABA announced the support package on Thursday, saying it will be available to small business and home loan customers that are “significantly” affected by current lockdowns or recovering from recent lockdowns regardless of geography or industry.
The ABA is made up of 22 member banks, including the big four and other major banks operating in Australia.
The support includes up to three-month repayment deferrals for business loans offered to small business customers that borrow less than $3 million and have a turnover of less than $5 million. This includes up to 98% of small businesses.
The deferrals will only be available for loans in good standing, meaning that small businesses will need to have their repayments up to date or have already engaged in a payment program with their bank to qualify.
The support package also includes refunds of merchant terminal fees for up to three months.
Business customers paying fees and notice periods on Cash Deposits and Farm Management Deposit accounts will be able to request three-month deferrals of fee payments.
Additionally, the ABA will offer home loan support, including deferrals on a month-by-month basis to both individual and business customers.
Announcing the package on Thursday, ABA chief executive Anna Bligh said banks are ready to do whatever they can to shield their customers from the effects of recent lockdowns.
“While we know that the Australian economy is in good shape, we also know that recent lockdowns have taken their toll on customers and the recovery can be slow,” she said.
“Customers can rest assured that if they need help, they will get it. Your bank will help you find a way through, don’t tough it out on your own.”
The announcement comes after the NSW government indicated it was “considering” further support for small businesses affected by Sydney’s current lockdown. To date, the NSW government has announced a support package of grants of up to $10,000.
The Australian Banking Association’s package is subject to authorisation by the Australian Competition and Consumer Commission, which the ABA is urgently seeking.