Banks to help commercial landlords who help tenants
Australia’s banks will extend the six month deferral of loans, building on the Australian Banking Association’s Small Business Relief Package, to 30,000 more businesses across the country.
This support now extends to 98% of all businesses with a loan from an Australian bank.
Businesses with total business loan facilities of up to $10 million (up from the $3 million small business threshold) will now be able to defer repayments for loans attached to their business for six months.
Combined with measures already announced, it will mean a six-month deferral of loan payments will apply to up to $250 billion worth of loans, with extra cash available to 425,000 businesses.
During this period banks have also agreed to not enforce business loans for non-financial breaches of the loan contract (such as changes in valuations).
ABA Chief Executive Anna Bligh said the initiative covers approximately 90% of commercial property owners who have loans with an Australian bank.
The new measures will apply for commercial property landlords, if they provide an undertaking to the bank that for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears as a result of COVID19.
“Where landlords within this threshold do the right thing by their tenants, banks will do the right thing by them,” Ms Bligh said.
“As this crisis has deepened and more businesses are affected, we are building on the Small Business Relief package to ensure more businesses are given a lifeline.”
“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 $3 million to up to $10 million in total loan facilities.”
Businesses with total loans of more than $10 million may also be eligible for relief, but this will need to be considered on a case by case basis as they are often much more complex in their structure.
Australian banks have hardship teams ready to help. The type of assistance will depend on individual circumstances, including:
- A deferral of scheduled loan repayments
- Waiving fees and charges
- Interest free periods or no interest rate increases
- Debt consolidation to help make repayments more manageable.
The earlier you contact your bank the more assistance they will be able to provide.
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