COVID-19 & Business Banking!

MoneyQuest’s Top 15 Frequently Asked Questions

1. If my business has been impacted by COVID-19 and I have a business loan, is there any help available?

Yes – all banks are offering a deferral of repayments for up to six months on business loans of up to
$10 million for small and medium businesses. It’s important to note that while your repayments are deferred, interest will continue to be charged and capitalised to the loan. 

At the end of the deferral period, your bank will either extend your loan term and keep your repayments in line with what you’re currently paying or increase your loan repayments to keep your loan term unchanged.

To apply, please contact your Bank Relationship Manager or request an online call-back if available as an option on your bank’s website.

2. Does the six-month deferral of business loan repayments apply to both interest-only and principal and interest repayments?

Yes, the deferral of repayments is available on both Interest-Only and Principal and Interest (P&I) loans.

3. Will the deferral of my business loan repayments adversely impact my credit rating?

No – banks will not be reporting the deferral of loan repayments to external credit rating agencies.

4. Do the banks Business Relief Packages apply to sole traders as well?

Yes – sole traders are included as small business operators.

5. If my business has been impacted by COVID-19, would my bank consider temporarily increasing my overdraft facility or granting a temporary one for me?

Yes – most banks have included within their COVID-19 Business Support Packages the option of granting a temporary overdraft facility for up to 12 months if appropriate.

To apply to have an overdraft facility increased or established contact your Business Relationship Manager, or request a call back (if available) as an online option on your bank’s website.

6. What is the JobKeeper Bridging Payment Scheme? 

This Scheme involves the big four banks agreeing to provide urgent bridging finance to businesses needing to pay their staff ahead of receiving their first JobKeeper payment.  The banks have established dedicated hotlines and agreed to bring to the front of the queue all bridging finance applications.

For further information on JobKeeper, see below:

https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions_2.pdf

7. If my business has been impacted by COVID-19, are there any lenders that will help me with an unsecured loan?

Yes – the Federal Government has launched the Coronavirus SME Guarantee Scheme where it is supporting up to $40 billion of loans to SME’s – including sole traders and not for profits.

https://treasury.gov.au/coronavirus/sme-guarantee-scheme

Under the Scheme, the Government will act as guarantor for 50% on each new loan issued by participating lenders.

https://treasury.gov.au/economic-response-coronavirus-coronavirus-sme-guarantee-scheme/list-participating-lenders

The loans are available to SME’s with an annual turnover of up to $50 million and have a maximum amount of $250,000 with a three-year term – including an initial six-month repayment holiday.

The good news is that these loans will have no establishment or account fees.

The loans will be provided on an unsecured basis – with the exception of personal guarantees that lenders can ask for and a General Security Agreement (GSA) in some cases.

It’s important to note that eligible lenders will be applying their own assessment criteria and as such a loan application may be assessed favourably with one lender but unfavourably with another. 

8. How do I apply for a business loan under the Coronavirus SME Guarantee Scheme?

You have two choices:

(i)  Apply directly with a participating lender, or

(ii) Contact us for assistance. 

9. If my business has been impacted by COVID-19, is there any relief on my merchant credit card facilities?

Yes – most banks are offering to waive merchant rental fees and minimum monthly fees for up to three or even six months.

Some banks are reaching out directly to offer this waiver to their merchant customers, while others require you to contact them.

10. Is there any relief available on my business insurance policies?

Yes – most insurers have released Small Business COVID-19 Relief Packages where they are offering premium deferrals on policy renewals.

11. Can I defer my business credit card repayments?

Yes – some banks are allowing for deferred repayments for up to three months.

12. Can I access my term deposit funds without incurring a penalty?

Yes – some banks, building societies and credit unions are allowing for the early termination of Term Deposits without applying an adverse interest rate adjustment.

13. Are there any incentives to help me invest in my business?

Yes – the Federal Government has increased the instant asset write-off from $30,000 to $150,000 for new or second-hand assets first used or installed and ready for use between March 12th 2020 and June 30th 2020.   For more detail go to https://www.smallbusiness.wa.gov.au/blog/coronavirus-stimulus-package-small-business.

14. Is there any relief for what my business owes to the Australian Taxation Office (ATO)?

Yes – The ATO will also consider relief for certain tax obligations for eligible businesses, including deferring tax payments up to four months.

If COVID-19 has caused disruption to your business operations and you fall behind with your tax and super obligations, please review the ATO’s information on COVID-19 ,call them on 1800 806 218 or speak with your tax accountant.

15. What should I do next? 

If your business is experiencing financial hardship, please give us a call as we are here to help, 1300 886 100.

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