Given the significant market disruptions now becoming apparent across the country, the major Australian banks have announced how they will assist their impacted business customers. While many individuals are rightly focusing on the health and wellbeing of their own family, the impacts on business and employment are often the next thing on their mind, including NAB supporting deferred business card payments.
It is still too early to know how this crisis will unfold and how the impacts will be felt across the economy, but it is clear a number of sectors will face severe disruptions. We are already seeing the warning signs in tourism, transport, education, sporting, hospitality and entertainment. Unfortunately, many businesses in these sectors are likely to be pushed to the brink and some will fail. Failing businesses contribute to unemployment, loss of capital and broader impacts on the community.
Sometimes the difference between getting through the crisis or failure is engaging early with your key stakeholders, which includes your bank, creditors and the Australian Tax Office.
Most banks in Australia are offering a range of assistance. While all the banks have advised that tailored assistance will be considered on a case by case basis, the following table outlines the specific areas where banks are offering help.
| Business Customers | ANZ | CBA | NAB | WBC | BOQ | Suncorp |
|---|---|---|---|---|---|---|
| Defer Payments | Yes | Up to 3 months | Up to 3 months | Up to 3 months | Yes | Yes |
| Extension of loan term | Up to 3 months | Up to 3 months | ||||
| Restructuring & consolidating loans | Case by case | Case by case | Case by case | |||
| Breaking term deposits without rate / fee impact | Yes | Yes | Yes | Yes | Yes | |
| Deferred Business Credit Card payments | Yes | Yes | ||||
| Business financial counselling access | Yes | |||||
| Merchant terminal fee waivers | Up to 3 months | Up to 3 months | ||||
| Interest Rate Relief | Yes, by 0.25% | No increases | ||||
| Fee-free Redraw | Yes | |||||
| Additional bank staffing to process decisions | Yes | |||||
| Waiving fees / interest on temporary excesses | Yes | Yes | ||||
| Working capital assistance | Yes | |||||
| Special arrangements regarding arrears | Yes |
Note: this list is current as at 16/03/20 based on each bank’s public announcements
In many cases, seeking assistance from your existing bank is normally a more sustainable solution (and less expensive) than seeking unsecured working capital loans. If you’re faced with uncertainty regarding your business cash flow and would like assistance to talk about the options for dealing with your finance requirements, our Debt Advisory team is here to help. We are experienced bankers who can help guide you through your discussions with your bank.
It may be the case that assistance from your bank is only part of the solution and other strategies may be required. We can help guide you to our restructuring experts who can provide assistance in navigating these issues.
Source: BDO
