Posted on March 27, 2020 by Ashley Dawson
As part of the COVID-19 crisis response, there are several initiatives announced by Government and lenders in order to assist small and medium sized businesses (SME’s) to preserve cashflow.
Coronavirus SME Guarantee Scheme
As part of the Federal Government economic stimulus packages, a $20 billion Coronavirus SME Guarantee Scheme has now been legislated, which will provide a 50% Government guarantee on new loans issued by eligible lenders to SME’s. The key points of this measure are:
- It will be available to all businesses with a turnover of less than $50 million
- The Federal Government will guarantee 50% of an eligible loan through participating banks and non- bank lenders to businesses disrupted by the Coronavirus
- Loans will be used for working capital purposes and be unsecured and it will be for loans granted within 6 months starting from 1 April 2020
- Borrowers will not be charged a fee for accessing the guarantee scheme
- Loans will be repayment free for 6 months
- The maximum that can be borrowed under the guarantee facility will be $250k on terms of up to three years
Loan Repayment Pauses
There are different levels of support being offered by the different lenders, however the experience over the past week is that all lenders are open to putting both home and business loans on repayment pauses of between 3 to 6 months. In order to access, please contact your lender directly to discuss your options.
Lenders are also offering options in regards to reduced variable interest rates and lower fixed interest rates, again depending on the lending institution itself.
Below is a list of lenders and their contact details including links to each of the Financial Hardship applications. We recommend accessing via the links below as the first point of contact, if you do not have a Relationship Manager currently, given the extremely high level of calls all lenders are currently experiencing.
AMP – 1300 130 191
https://www.amp.com.au/home-loans/financial-hardship
ANZ – 1800 252 845
https://www.anz.com.au/promo/covid-19/
BOQ – 1800 079 866
https://www.boq.com.au/important-information/Financial-hardship
BANKWEST – 1300 769 173
https://www.bankwest.com.au/help/coronavirus-support#content-btc-879824365
BENDIGO & ADELAIDE BANK – 1300 652 146
https://www.bendigobank.com.au/help#tab-383478
CITIBANK – 1300 300 470
https://www1.citibank.com.au/help-and-support/financial-hardship
COMMONWEALTH BANK – 1300 720 814
Home Loans:
https://www.commbank.com.au/latest/support-for-home-loan-customers.html
Business Loans:
https://www.commbank.com.au/latest/coronavirus/business-support.html?ei=cor_deferbusloan#defer
ING 1300 349 166
Information:
https://www.ing.com.au/help-and-support/tips-hints-guides/financial-hardship.html
Application:
https://www.ing.com.au/pdf/Statement_of_Financial_Position.pdf
MACQUARIE – 1300 363 330
https://www.macquarie.com/au/personal/coronavirus
ME BANK – 1300 500 520
https://www.mebank.com.au/support/financial-hardship/
NAB – 1800 701 599
Information:
https://www.nab.com.au/personal/customer-support/covid19-help/home-owners-support
Application:
https://www.nab.com.au/common/forms/coronavirus-contact-form
SUNCORP BANK – 1800 225 223
https://www.suncorp.com.au/banking/help-support/financial-difficulty.html
WESTPAC – 1800 067 497
Information:
https://www.westpac.com.au/business-banking/small-business-relief.html
Application:
https://www.westpac.com.au/business-banking/business-loans/defer-business-loan-payments-form/
Should you require any assistance with these measures or any of the other COVID-19 economic stimulus package announcements, please contact our Team on (08) 9316 7000.
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Posted on March 23, 2020 by Ashley Dawson
The Morrison Government announced yesterday another round of stimulus package measures in response to the COVID-19 crisis. The $66 billion second stage package is aimed at small to medium businesses keeping their staff employed, and also measures for workers that have lost their jobs due to the crisis.
Boosting Cash Flow for Employers
The Government is providing up to $100,000 to eligible small and medium sized businesses, and not for-profits (including charities) that employ people, with a minimum payment of $20,000. In the first round of measures announced, this was $25,000 with a minimum payment of $2,000. These payments will help businesses’ and not-for-profits’ cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
Under the enhanced scheme from the first package, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000. The payment will be available from 28 April 2020.
By linking the payments to business to staff wage tax withholdings, businesses will be incentivised to hold on to more of their workers.
Small and medium business entities with aggregated annual turnover under $50 million and that employ workers are eligible. NFPs entities, including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment at a time where NFPs are facing increasing demand for services.
An additional payment is also being made from 28 July 2020. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments received.
As this measure is administered through Business Activity Statements, all ATO lodgements must be up to date.
Early Release of Superannuation
The Government will allow individuals in financial stress as a result of the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Coronavirus Supplement
The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
The Coronavirus supplement will be paid for the next 6 months. Eligible income support recipients will receive the full amount of the $550 Coronavirus supplement on top of their payment each fortnight.
Coronavirus SME Loan Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the coronavirus.
Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.
The Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs.
The Scheme will complement the announcement the Government has made to cut red-tape to allow SMEs to get access to credit faster. It also complements announcements made by Australian banks to support small businesses with their existing loans.
Temporarily reduce superannuation minimum drawdown rates
The Government is temporarily reducing superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
Reducing social security deeming rates
On top of the deeming rate changes made at the time of the first package, the Government is reducing the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA.
As of 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent.
We will be contacting clients directly to discuss if they are eligible and how these measures can be accessed, however should you have any questions in the meantime please contact us on (08) 9316 7000.
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