At a time when the entire economy is coming to grips with the once-in-a-generation economic threat posed by COVID-19, the Australian Banking Sector has announced that it will provide much needed relief to small and medium business owners across the country – including those within the national fuel industry.
Earlier today, the CEO of the Australian Banking Association (ABA) announced that the Nation’s Banks will provide a 6-month holiday from business loan repayments for businesses experiencing difficulties as a result of the COVID-19 downturn.
“This Assistance Package will apply to more than $100bn of existing small business loans and depending on customer take up, could put as much as $8 billion back into the pockets of small businesses as they battle through these difficult times,” Ms Bligh said,
A copy of the full ABA Announcement can be found at:
The announcement comes at a time when many small to medium business owners are getting increasingly worried about the future of their business – and the livelihood of their employees.
“The announcement means that business loan repayments can be put into hibernation for a period of up to 6 months, allowing the business to use this cash to keep the doors of their business open – and their staff employed”, said ACAPMA CEO Mark McKenzie
“Our industry needs to follow this leadership. We must ensure that, to the fullest extent possible, we use the cashflow released by this concession – and those already announced by the Australian Government – to keep our staff employed”, said Mark
“The key to this Nation’s economic survival is to keep money circulating in the economy via maintenance of wages and household spending at the highest level possible. All of the businesses in our industry have a responsibility to assist with the achievement of this aim”, added Mark
ACAPMA understands that the banks will not be applying any firm threshold to what constitutes a ‘small business’ for the purposes of this new assistance. As a very general guide, the measure is principally targeted at business with a nominal aggregate value of business loans of up to $3M , but businesses that are above that are also encouraged to approach their bank for assistance under this concession.
It is important to note that this is not ‘free money’ so to speak. ACAPMA understands that the business will still accrue interest on the aggregate loan balance but will not be required to make any payments for 6 months, and the interest of the period will be capitalised in future loan payments – meaning that there is no ‘nasty surprise’ for the business in the future.
ACAPMA also understands that the concession applies to all loans held by the business – whether that be business loans, home mortgages held by the business, and even car loans.
“The big message here is talk to your bank about the specific concessions available to your business as soon as possible if you need help – even if you sit above this nominal $3M threshold in total business borrowings, said Mark.
“We are living in extraordinary times and this is a phenomenal gesture by Australia’s banking industry. It has been made possible by the fact that Australia’s banking system has been well managed over the past decade and is in a strong position to offer this assistance without compromising the integrity of our national financial system”, said Mark
“We, as an industry with more than 2500 businesses employing around 40,000 Australians are grateful for the leadership shown by ABA Chair Matt Comyn (CEO, Commonwealth Bank), ABA CEO Anna Bligh and all CEO’s of Australia’s Banks”, said Mark
Our thanks also go to COSBOA CEO Peter Strong, and the entire COSBOA Board, for the work that they have done, and continue to do quietly in the background, to champion the needs of Australian SME’s at such a critical time.