A decision that will provide relief for more businesses during the coronavirus outbreak
On Monday, the Australian Banking Association (ABA) revealed that they will be extending the six-month loan repayment deferral programme to 30,000 more commercial property owners affected by the COVID-19 outbreak, reported Business News Australia.
Companies with total loan facilities of upwards AUD10 million (USD6.1 million) can now postpone repayments for their business loans for six months. The said amount is up from the AUD3 million small business threshold previously declared.
With this new threshold, ABA will now be able to help 98 percent of businesses with a loan, along with AUD100 billion more business loans. When combined, the overall loan repayments deferred by local banks sum up to AUD250 billion.
Throughout the outbreak, banks have also decided not to impose penalties for non-financial violations of the loan contract, including valuation changes.
“As this crisis has deepened and more businesses are affected, we are building the Small Business Relief package to ensure more businesses are given a lifeline to help them survive through the coronavirus pandemic,” says Anna Bligh, the chief executive officer at ABA.
“Banks are expanding their support to an extra 30,000 thousand businesses by raising the threshold of those who qualify for the six-month deferral of loan repayments from AUD3 million to up to AUD10 million in total loan facilities.”
“This will help protect many more thousands of small businesses from being evicted if they are struggling to pay the rent as it covers approximately 90 percent of commercial property owners who have loans with an Australian bank.”
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