Major banks to defer loan repayments for small businesses
Australia's banks will defer loan repayments for small businesses affected by the coronavirus crisis for six months in an effort to free up cash.
The assistance package, announced by Australian Banking Association CEO Anna Bligh, will start from Monday.
No measures have been rolled out for individual mortgage customers, with banks waiting until hardship volumes spike before rolling out a specialist assistance package for individuals.
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"We know that this is going to keep evolving," Ms Bligh said.
"As we see trends in other parts of banking, we will do what we can to respond."
Small businesses with ongoing loans are currently being contacted by their bank and have been urged to ring their bank if they have not heard from them.
"This assistance package will apply to more than $100 billion of existing small business loans and depending on customer take up, could put as much as $8 billion back into the pockets of small businesses as they battle through these difficult times," Ms Bligh said.
"This is a multi-billion-dollar lifeline for small businesses when they need it most, to help keep the doors open and keep people in jobs."
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Ms Bligh said by stopping small business loan repayments, it should help free up cash to pay the wages of employees.
"Small businesses are the most vulnerable part of the economy and have the most urgent need for assistance," Ms Bligh said.
"Small businesses employ five million Australians and this package is designed to help them keep doing just that.
"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."
Individuals who are suffering from mortgage stress as a result from the coronavirus crisis are being urged to ring their bank and ask about their hardship policy.
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"Banks typically provide customer support for anyone undergoing financial hardship at any given time," Ms Tindall told 9News.com.au.
"If someone is affected by coronavirus and experiencing financial difficulty as a result they can pick up the phone to their bank and discuss their options."
Ms Tindall said the recent Australian bushfire crisis has laid the groundwork for the major banks offering assistance packages to individuals.
"In the recent bushfires, some banks provided assistance to affected customers," Ms Tindall said.
"If the coronavirus continues to escalate, and it becomes difficult for people impacted by the virus to repay their loans, banks may start rolling out support packages to affected retail customers."
Several of Australia's big four banks have already begun rolling out COVID-19 assistance packages, but have stopped short of offering wide-scale mortgage repayment suspensions for retail customers.