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Australian banks have offered loan repayment deferrals of up to three months to their small business customers as New South Wales succumbs to hardened lockdown restrictions.
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Banks offer loan lifeline as NSW battles ongoing lockdown
12 July 2021
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11 minute read
Australia’s banks on Friday each announced varying small-business support options to customers affected by hardened state lockdown restrictions spanning loan repayment deferrals of up to three months, merchant terminal fee refunds and waived fees.
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Australian Banking Association (ABA) CEO Anna Bligh said that customers should rest assured if they need support, because their banks will give it to them.
“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,” Ms Bligh 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.”
According to the ABA, the national support package will be made available to all small businesses and home loan customers “significantly impacted” by current lockdowns or recovery from recent lockdowns, irrespective of geography or industry.
The Commonwealth Bank of Australia (CBA) said it will offer repayment holidays of up to three months to customers with a “better business” loan of up to $3 million. Eligible businesses will be “proactively contacted” by the bank with details of the offer from Tuesday.
CBA chief executive Matt Comyn said the tourism, hospitality and retail industries are likely to be feeling the worst of the lockdown’s economic impacts.
“The pandemic continues to impact businesses across Australia, with small businesses in particular facing cash flow challenges as a result of the lockdowns and restrictions on travel,” Mr Comyn said.
“We recognise that some small businesses, like those in the tourism, hospitality and retail industries, are where the effects of lockdowns are being most acutely felt.”
Westpac, too, announced a number of additional support measures geared towards its business customers, in addition to the existing COVID-19 support measures already on offer.
Like CBA, Westpac business customers will be able to defer repayments on loans of up to $3 million for as long as three months, with loan terms extended as required. Eligible Westpac customers will also be offered refunds for merchant terminal fees for up to three months, as well as waivers for fees and notice periods on Cash Deposit and Farm Management Deposit accounts.
Westpac CEO Peter King said the banking sector must play a key role in stabilising the impacts brought on by the pandemic, and that the bank has “scaled up” its support as a result.
“We are seeing the need for immediate support for small business owners who are experiencing challenges with reduced trade, cash flow and foot traffic as more people stay at home, particularly in areas with lockdown restrictions like Greater Sydney,” Mr King said.
“We have scaled up our support to reflect the longer impact of COVID-19 and have a dedicated team of bankers available to help tailor this assistance to our customers’ personal circumstances.
“In 2020, Westpac helped more than 175,000 mortgage customers and 40,000 business customers defer loan repayments through our COVID-19 support packages, and we will continue to assist our customers through the challenges ahead.”
Meanwhile, ANZ will offer targeted relief to retail businesses including short-term payment relief, waiving fees — though exactly which fees weren’t clarified — and restructuring home loan debt or switching to a fixed-rate loan.
Broader small business support will also be offered by the bank which will include access to short-term payment relief on asset finance or business loans, refunds on merchant terminal fees and the option to have some other fees waived.
ANZ group executive of Australia, retail and commercial banking, Mark Hand said he wanted those businesses affected by the state’s lockdowns to know the bank is ready to support them.
“We know this lockdown will have a big impact on our customers in and around Sydney,” Mr Hand said. “Like the lockdowns we’ve seen in other states, we know it can be some time before the real effects are felt by families and businesses.
“We want our customers to know there is help available if they need it in this difficult time. Our teams are standing ready to assist and will work with customers to understand their specific needs and help tailor individual solutions.”
At the National Australia Bank (NAB), small business customers will be offered support as per the guidelines of the ABA’s announcement. That includes “business banking” repayment deferrals of up to three months, with loan terms extended accordingly, made available to small businesses with lending less than $3 million and a turnover of less than $5 million — some 98 per cent of small businesses.
NAB chief executive Ross McEwan said even though the Australian economy has rebounded faster than expected, Australian businesses will continue to face challenges.
“Small businesses — especially those in retail, travel, tourism and hospitality — have suffered considerably throughout this crisis and these measures sit on top of a range of support we have available,” Mr McEwan said.
“We have thousands of bankers around the country ready to help our customers and the business community.”
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