COVID-19: What Australian Banks are doing to relieve SMEs Businesses

The Australian Banks are coming up with specific measures to protect and relieve the Startups and SMEs during these hard times, we suggest you have a look at the biggest four ones.


Since this Wednesday, after Prime Minister, Scott Morrison, speaks to the country, most of the businesses needed to change the way they were acting. Some of them even needed to close their doors.


Expecting these decisions and even harder times, which are yet to come, the Australian Banking Association announced last Friday an emergency plan. These measures include a $90 billion pledged by the Reserve Bank of Australia (RBA) to buy government bonds, to support the banks in lending to small and medium businesses. While the government also spoke about $15 billion for smaller and non-bank lenders in order to support SMEs.


In response to that, the four main country’s banks already came up with their own support packs for Small and Medium Businesses over the next 6 months. 

All in all, we can say that, under this Coronavirus relief package, small businesses are going to get a six-month break from making repayments on their loans. 

In accordance with Startup Daily, we give you a summary of how ANZCommonwealthNAB, and Westpac are acting on this point.


Commonwealth Bank 

  • Reduce rates on business loans by 100 bps  (in addition to the 25 bps reduction announced on 3rd March and will come into effect on 3 April)
  • Support the RBA’s new term funding facility, which incentivizes lending to businesses.
  • Continue to offer a range of measures to provide further assistance to customers facing financial hardship, including:
  • waiving merchant terminal fees
  • waiving redraw fees
  • waiving early redraw fees on business term deposit accounts (including Farm Management Deposit accounts)
  • waiving establishment fees and excess interest on Temporary Excess products
  • deferring repayments on vehicle and equipment finance loans, and providing tailored restructuring options that meet individual customer needs 


Westpac

  • 2% reduction on overdrafts for new and existing customers, effective Monday 6 April 2020
  • 1% interest rate reduction for small business cash-based loans, effective Monday 6 April 2020
  • Repayment relief: Westpac small business customers can defer principal and interest repayments of business term loans for up to six months
  • Merchant terminal rental fee waivers for up to three months
  • No establishment fees for equipment finance loans until the end of June 2020
  • Additional help already available to small business customers impacted by recent disasters
  • Deferred payments for Business credit cards for a period of at least three months
  • Fee-free redraw
  • Restructuring and consolidating loans
  • Termination of a term deposit without the interest rate adjustment

ANZ 

  • Decrease variable interest small business loan rates in Australia by 0.25%pa, effective from 27 March 2020, resulting in a 0.50%pa reduction since last week
  • All impacted customers can request a six-month payment deferral on loan repayments for term loans, with interest capitalized
  • Making available temporary increases in overdraft facilities for 12 months
  • A reduction by 0.80% pa to a new two and a three-year fixed rate of 2.59% pa for secured small business loans up to $1 million, effective 3 April 2020


NAB

  • Defer principal and interest for up to six months on a range of business loans including floating and variable rates, and equipment finance loans
  • Receive a 200-basis point rate cut on QuickBiz loans and overdrafts, effective March 30
  • Receive an additional 100-basis point reduction on variable rates for small business loans, effective March 30 (this is on top of a 25-bps reduction earlier this month)
  • Access up to $65 billion of additional secured limits to pre-assessed customers, with $7 billion currently available for a fast assessment process
  • Access up to $9 billion in additional limits for unsecured lending for existing customers via QuickBiz
  • Defer business credit card repayments
  • Request merchant terminal (including HICAPS) fees are waived for up to 6 months
The Author
Aro Xi
Marketing Specialist at iShare Incubator

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