Where to go for help if you can't meet your loan repayments
Our friends over at PT Partners have provided some very useful information regarding banks and how they are working with their customers to provide support through the COVID-19 pandemic. This is on the back of a range of measures announced by the government as part of their Coronavirus Stimulus Package, including:
Loan Repayment Relief
Banks will defer loan repayments for six months for small businesses who need assistance because of the impacts of the coronavirus.
SME Loan Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the Coronavirus. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs.
Low Cost Loans from Smaller Lenders
$15 billion in stimulus investment will be made available to enable small banks and non-banks to supply low-cost loans to customers and small business. This will enable customers of smaller lenders to continue to access affordable credit.
Strategies for dealing with your bank
Personal and business customers should consider making the following requests of their bank:
- deferring principal reductions; and
- pausing asset finance repayments immediately; and
- moving home loans to interest only, or pausing principal and interest repayments; and
- amending or deferring conversations surrounding covenants / conditions, or having covenants waived altogether.
Importantly, the time to act on this is now to preserve flexibility moving forward, remembering that whilst planning for the worst and hoping for the best, the ability to be be able to grow profitably on the other side is something that can be planned for now.
Links for the major banks and their COVID-19 support packages are as follows: