Explained: The small business support available from the big four banks

More small businesses are receiving hardship support from their banks amid ongoing lockdowns in the country’s two most populous states.

New statistics released by the Australian Banking Association show hardship assistance, including deferring credit card payments and waiving fees and charges, has almost tripled over the last month, up to 57,000 from 20,000.

Anna Bligh, chief executive of the Australian Banking Association, said while most hardship approvals have come from New South Wales and Victoria, customers nation-wide have access to hardship assistance.

“As lockdowns continue to be extended across cities and states, it is no surprise more strain is being put on people and businesses but it is important to remember that banks are here to help,” Bligh said.

Here’s a round up of the coronavirus business support measures currently being offered by the four major banks.

Commonwealth Bank

Loans deferrals and merchant fees

CBA is offering business customers short-term repayment deferrals if they are affected by lockdowns.

Businesses can also request a refund of merchant terminal rental fees, minimum monthly merchant service fees, monthly access fees, and simple merchant plan fees for up to 90 days.

The bank also announced last week that it will be waiving $7 million worth of terminal rental fees for more than 50,000 customers between now and Christmas for businesses affected by the COVID-19 pandemic

Cash flow support

CBA customers that have registered to receive the government COVID-19 payments and need additional cash flow support in the interim can request bridging finance.

To be eligible to apply for bridging finance, customers must have opened a Business Transaction Account with CommBank prior to January 1, 2021.

SME recovery loan scheme

Loans of up to $5 million are available to eligible SMEs until December 31, 2021.

The loans must be used for business purposes or the purchase of commercial property and are part of the federal government’s SME recovery loan scheme.

Under the scheme, businesses can access secured and unsecured loans to pay for business expenses or to refinance eligible commercial debt. To be eligible, SMEs must have turnover of less than $250 million and meet the full eligibility criteria.

National Australia Bank

SME recovery loan scheme

NAB is also offering business recovery loans through the federal government’s SME recovery loan scheme.

Eligible businesses can borrow up to $5 million with a secured loan, or up to $250,000 with an unsecured loan. The loans are offered on terms of up to 10 years, and no repayments required for 12 months but interest continues to accumulate during this period. More information about NAB business recovery loans is available here.

Hardship support

NAB is working with business customers on a case-by-case basis if they can’t make minimum monthly payments or are likely to go into financial hardship.

Ana Marinkovic, executive for small business at NAB, says the bank is aware of how challenging it is for businesses to manage cash flow during this challenging time.

“We have thousands of bankers across Australia speaking with customers to understand the challenges individual businesses are facing and to provide support,” Marinkovic tells SmartCompany.

Westpac

Temporary overdrafts

Westpac’s small business customers can request interest-free temporary overdrafts of up to $15,000 for a maximum of 45 days to help with cash flow.

Repayment deferrals on loans

Small business customers can also defer payments for three months on eligible business loans with a total committed exposure of up to $3 million. The loan payments that businesses can defer include business, equipment and auto finance loans.

SME recovery loan scheme

Like other banks, Westpac is participating in the federal government’s SME recovery loan scheme.

Detailed information about the loan scheme is available at this Westpac webpage.

Transactional and merchants

Westpac is offering business customers no interest rate adjustments for early terminations on term deposits or farm management deposits.

Businesses can also request refunds on merchant terminal rental fees, minimum monthly service fees or simple pricing plan fee refunds for up to three months.

Business credit card

Westpac customers with business credit cards can defer monthly payments and interest charges for three months.

Shane Howel, managing director of business lending, tells SmartCompany that business customers should call Westpac if they have concerns about their finances.

“Westpac offers a range of alternatives for households and small business customers including loan deferrals for up to three months and interest free overdrafts for small businesses to assist with cash flow,” Howel says.

ANZ

SME recovery loan scheme

Similar to the other big four banks, ANZ is offering loans through the SME recovery loan scheme. Businesses can borrow up to $5 million on loan terms of up to 10 years.

While the eligibility criteria is generally the same for all small businesses, details of ANZ’s options are available here.

Business banking

ANZ is also encouraging its business customers to contact their business banking manager to discuss what other assistance is available.