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FAQs: what you need to know about COVID-19 bank relief
15 May 2020
Helping Aussie businesses remain viable and keeping people in their homes is good for everyone.
Relief has now been extended to 98% of all businesses with loans with an Australian bank.
Contact your bank online today to get a six month deferral of your business loan.
Contact your bank online today to ask about a six month deferral on your mortgage.
COVID-19 bank relief FAQs
Australian banks will defer loan repayments for six months for small businesses who need assistance because of COVID-19.
Other assistance can include fees waived, loans restructured, and further credit offered to get through the pandemic.
Yes, it applies to all current small business operators.
You must contact your bank to opt in. A fast track approval process will provide support as soon as possible.
To be eligible, you must have less than $3 million total debt to all credit providers. You need to be current, and not in arrears as of 1 January 2020. It does not matter how many people you employ. Some banks are applying these criteria flexibly, if you fall outside these criteria, please contact your bank.
Yes. Banks are offering loans at very low interest rates, supported by the Government, through an SME Loan guarantee. Your business would still need to meet certain lending criteria set out by your bank.
Customers will self-assess whether their business has been adversely impacted, no further verification will be required.
While you won’t have to make any principal or interest payments for the 6 months, interest will continue to be accrued, it can then be paid off over the life of the loan once repayments begin again, or the length of the loan can be extended. This will be a conversation between you and your bank.
Yes. Banks have hardship teams in place to assist people experiencing financial difficulty as a result of COVID-19. Our banks are now offering customers the option to defer home loan repayments for up to six months. Contact your bank to discuss how they can help you.
If you have been impacted by COVID-19 and are experiencing hardship, your bank can help. Assistance can include waiving fees, restructuring loans or other things to help get you through the pandemic. Check your banks website under ‘Hardship’.
As long as you were up to date on your payments before COVID-19 the deferral will not impact your record. This applies to deferrals on your mortgage or other credit products.
Banks don’t report information to credit bureaus about small business customers.
Your bank wants to partner with you through this difficult time. Getting people back to work and keeping them in their homes is what is in the best interests of all Australians.
Many banks are contacting their customers directly to see what help they may need. However, if you are worried it’s very important that you contact your bank as soon as possible. The earlier you contact your bank the more assistance they will be able to provide.
Businesses with total business loan facilities of up to $10 million (up from the $3 million small business threshold) will also be able to defer business loan repayments for six months. These businesses are generally much larger and employ a greater number of people. Support now extends to 98% of all businesses with a loan from an Australian bank.
Yes, commercial property landlords can get relief as long as you provide an undertaking to the bank that for the period of the interest capitalisation, you will not terminate leases or evict current tenants for rent arrears as a result of COVID-19.
Banks are now offering customers the option to defer home loan repayments for up to six months.
Other assistance can include fees waived, loans restructured and further credit offered to get through the pandemic.
Australian banks will defer loan repayments for six months for small businesses who need assistance because of COVID-19.
They are also offering loans, including overdrafts, with no repayments for the first six months, at very low interest rates, supported by the Government, through an SME Loan guarantee.
A fast track approval process will provide support as soon as possible.
While you won’t have to make any principal or interest payments for the 6 months, interest will continue to be accrued, it can then be paid off over the life of the loan once repayments begin again, or the length of the loan extended. This will be a conversation between you and your bank to determine your preference.
There are many ways to contact your bank to access assistance.
Firstly, online is best either through your bank’s website or smart phone app.
Call centres are open and working overtime to help customers, however due to large volumes of calls we ask people to please be patient.
Branches continue to remain open however due to the Government’s social distancing measures, it’s best to use digital banking if at all possible.
Many banks are contacting their customers directly to see what help they may need. However, if you are worried it’s very important that customers contact their bank as soon as possible. The earlier you contact your bank the more assistance they will be able to provide.
Bank branches remain open to serve customers.
In light of the government’s social distancing advice, some branches may limit the number of customers in the branch at one time. Customers should also ensure where possible they have up to date online banking arrangements or an app to conduct their banking business.
Consistent with the government’s advice you should not come to a branch:
- if you are experiencing flu like symptoms (cough, fever, shortness of breath); or
- if you have come into close contact or live with someone who has a confirmed case of COVID-19; or
- if you arrived in Australia from overseas after midnight Sunday 15 March; or
- if you have travelled from or through mainland China, South Korea, Iran or Italy in the last 14 days; or
- if you live with someone who has travelled through mainland China, South Korea, Iran or Italy in the last 14 days
As a result of the Government’s social distancing advice, banks are encouraging customers who are able to do their banking online or through their smart phone, should do so.
Branches and ATMs will remain open throughout the pandemic. There may be a limited number of instances where a branch needs to temporarily close, however customers affected will be directed to a branch nearby.
All customers should be getting ‘digital ready’. This means if you have a smart phone, download your bank’s app and become familiar with how to use it. If you are unsure contact your bank who can help or ask a tech savvy friend to help walk you through it.
Make sure to keep your log-in details and passwords safe and don’t share them with anyone.
Australia Post outlets remain open for customers to use for their daily banking.
First stop should always be contacting your bank to see what options there may be. All banks have the flexibility to restructure your loans and help if you are in hardship. As always if you are unhappy with the deal that you are being offered by your bank shop around.
Yes, online banking continues as usual.
If you were behind in repayments before, banks won’t report the repayment history information for the deferral period, they will leave that field blank for the duration of the crisis deferral period.
Bank call centres are receiving extremely high volumes of calls, so we please ask that you to be patient. If possible, please go to your bank’s website or use the smart phone app to complete your banking.
The Banking Code of Practice prohibits banks from requiring people to access superannuation to pay amounts owed (unless the borrowing is for a self-managed superannuation fund).
For every dollar that an Australian bank lends, regulation requires them to hold a certain amount of capital. If banks don’t charge interest, even if the loan is deferred, the loan must then be treated as ‘impaired’ under the accounting and banking rules. The bank is then required to hold more capital to support that impaired loan.
If banks stopped charging interest on the hundreds of thousands of deferred loans during the COVID19 pandemic they would not have enough capital to provide new loans. That would not be in the best interest of Australians and the need to support the Australian economy.
If you have Consumer Credit Insurance (CCI) it may help cover your credit card, personal loan or home loan repayments. Whether or not you are eligible to claim a CCI benefit will depend on your individual circumstances, including the level of cover you have purchased and how your employment circumstances have changed. Insurers are assessing CCI claims on an individual basis.
If you are unsure whether or not you have a CCI policy, check your loan documents, or check with your lender who will have all of the details of any related insurance products that they arranged for you.
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Banks have deferred the repayments of one in fourteen mortgages totalling more than $150 billion to assist Australians through the COVID-19 pandemic.
Helping businesses to remain viable and keeping people in their homes is good for everyone.
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