Small businesses will be allowed to defer loan repayments for six months under new emergency measures announced by the Australian Banking Association.
Australian Banking Association chief executive Anna Bligh said the relief package is expected to apply to $100 billion of existing small-business loans and said it could put “as much as $8 billion back into the pockets of small businesses as they battle through these difficult times”.
“This is a multibillion-dollar lifeline for small businesses when they need it most, to help keep the doors open and keep people in jobs,” Ms Bligh said.
The ABA’s announcement comes after the Reserve Bank announced an emergency cash rate cut to a record low of 0.25 of a percentage point.
The central bank also announced it would set up a $90 billion term funding facility for banks to specifically support their small-business clients.
According to Ms Bligh, the banks will put in place a fast-tracked approval process.
“Small businesses can rest assured that if they need help, they will get it. Banks are already reaching out to their customers to offer assistance, and packages will start rolling out in full on Monday,” she said.
‘“While this is first and foremost a health crisis, this pandemic has begun to have serious impacts across the economy, with small businesses beginning to feel the devastating effects.
“Small businesses are the most vulnerable part of economy and present the most pressing need for assistance in the economy today.”
Ms Bligh has advised that any small business who has not already been contacted should contact their bank to apply.
20 March 2020