The Australian Banking Association (ABA) has recently expanded its ‘COVID-19 Business Relief Package’ (Relief Package), meaning that 98% of all businesses with a loan from an Australian bank are now eligible to access the Relief Package.
Is your business eligible to access the Relief Package?
Your business will be eligible to access the Relief Package if it:
has been adversely impacted by COVID-19;
owes less than $10 million in total debt to its credit providers; and
is not in arrears in respect of its debt repayments as of 1 January 2020.
Businesses that satisfy the above criteria will be entitled to access the Relief Package regardless of its size or number of employees. This means that the Relief Package will also be made available to sole traders.
If any business finds that it falls outside of the above eligibility criteria, the ABA has encouraged those businesses to contact their banks to discuss their situation, as some banks are applying the eligibility criteria flexibly.
Benefits available under the Relief Package
Under the Relief Package, banks will allow eligible businesses to defer all repayments (both principal and interest) for any loans that are attached to the business for a period of six months.
It is important to note that interest will still accrue on all loans during that period. Any such interest that has accrued can either be paid off over the life of the loan once repayments recommence, or the life of the loan can otherwise be extended.
Banks are also offering loans, including overdrafts at very low interest rates to assist businesses to bridge cash flow gaps. Under the Government backed SME Loan Guarantee Scheme, no loan repayments will be required for the first six months of the loan. Businesses will still need to meet certain lending criteria set out by their banks before accessing these loans.
How to access the Relief Package
To access the Relief Package, you should advise your bank that your business has been adversely affected by COVID-19. Banks are ensuring that any required approval processes are being fast tracked to ensure that support can be provided to businesses as soon as possible.
Further information on the Relief Package can be found here or by contacting your bank.
Let us know if we can assist
Henry William Lawyers are available to support your business through this challenging time.