The majors launch the products of the SME recovery loan program
The big banks have all released details of new lending products, available directly and through the broker channel, that are part of the federal government’s SME Stimulus Lending Program.
The program, which was announced in March as part of an initiative to help small businesses that were on JobKeeper “fend for themselves as the economy recovers from COVID-19” or that have recently been affected by the NSW and Queensland floods.
Under the SME Stimulus Loan Program, small businesses that received the JobKeeper payment between January 4, 2021 and March 28, 2021 will be able to apply for loans of up to $ 5 million for terms of up to 10 years. Likewise, eligible flood-affected businesses with revenues of less than $ 250 million will be able to access loans whether or not they were on JobKeeper during the quarter.
The government guarantees 80 percent of loans and has said the maximum period a borrower can take repayment leave is 24 months. Borrowers taking repayment holidays are expected to have interest and charges accrued during the deferral period and capitalized at the end of that period.
Australia and New Zealand Bank (ANZ) launched its vANZ variable rate business loan, offering loans of up to $ 5 million with 12-month repayment deferrals. After this initial period, another 12 month deferral period may be available. The bank noted that the interest would be capitalized in the loan.
Borrowers can also do additional unscheduled refunds at any time.
The loan comes with secured and unsecured options (excluding residential property) and, weligible here, provide SMEs with the ability to refinance existing loans (including government guaranteed loans).
The bank has not released starting rates, but said rates may vary depending on ANZ’s credit criteria or the customer’s financial situation.
For all qualifying ANZ business loans that are eligible for the government SME turnaround loan program, the standard ANZ business loan approval fee and loan administration fee the charges have been waived.
the The Commonwealth Bank of Australia (CBA) said its variable rate loans would start at 2.6% per annum for secured loans and 2.85% per annum for secured loans with a 12-month repayment holiday. The rates on unsecured loans are available with rates of 3.25 percent per annum, or 3.75 percent per annum with a 12 month repayment holiday.
Mike Vacy-Lyle, Director of CBA’s Corporate Banking Services Group, said: “We are determined to continue to play a leadership role in the economic recovery in Australia. This program means businesses have the support they need to get back on their feet. As demonstrated in previous rounds of government support, ABC plans to play a leading role in mobilizing much needed funding.
“These lower-cost loans will help businesses invest in assets such as equipment and machinery, and will also support longer-term investments that support growth and jobs. Businesses will be able to use this program to refinance existing loans. ”
He added that the ABC has also recently introduced additional on-the-ground support for flood affected communities, stating: “We have around 100,000 business clients located in flood affected areas that we are working with to support them. as much as we can.
“Regardless of individual circumstances, our teams are there and ready to assist you, and I believe this SME Takeover Loan program will make a real difference to the long-term success of many Australian businesses,” said Vacy -Lyle.
NAB has started accepting applications for the NAB disaster recovery loan.
The NAB disaster recovery loan offers borrowers the option of a repayment holiday of up to 12 months, with a potential of up to 24 months. It includes unsecured or secure solutions (excluding residential property).
Andrew Irvine, Group Manager for Corporate and Private Banking at NAB, said: “With the phasing out of JobKeeper and the recent flooding in New South Wales, this loan will be a great option for industries that continue to grow. ‘be hit hard by the lingering uncertainty.
“Together, we can help Australian businesses and communities get back on their feet sooner. We are happy to start accepting loan applications under the program starting today, having collected expressions of interest online since the day after the program was announced, ”said Mr. Irvine .
Loan approvals will be subject to final confirmation of NAB’s participation in the program, the bank added. NAB also recently offered disaster relief customer support to businesses affected by the flooding, including grants of $ 2,000 to help cover the costs of inventory damage or cover the costs of temporary accommodation. and clothing.
Meanwhile, proceeds from Westpac’s SME Takeover Loan Program are available to eligible new and existing small businesses.
Variable rate loans start at an interest rate of 2.58 percent per annum for variable loans guaranteed for three or five years and 3.48 percent per annum for fully secured 10-year variable loans. However, Westpac added that these interest rates are not applicable to loans with a deferred payment period. Loans with a deferred payment option will be subject to an interest premium.
“The federal government’s Small Business Stimulus Loan Program will provide a lifeline for businesses that need more time and support to recover from the effects of the COVID-19 pandemic and flooding.”
Chris de Bruin, Managing Director of Consumer and Business Banking at Westpac, said: “Small businesses are the engine room of the Australian economy, and it is essential that we stay the course to help these businesses continue. and grow as part of Australia’s broader economic recovery.
“This targeted support is necessary for sectors and geographies that still face ongoing challenges due to the effects of the pandemic. The new loans allow small businesses to access low-rate financing, with the ability to defer repayments, to give business owners more breathing space. “
He added: “From tourism operators in Queensland to hotel business owners in South Australia, we have generated strong interest from clients to access the SME Takeover Loan program to help them overcome the challenges of come.”
Westpac has also made available a range of support services for homeowners and business customers affected by flooding in New South Wales and Queensland, including establishing a $ 10 million flood support fund. to provide subsidies to commercial operators.
He has reportedly helped 474 clients with grants totaling $ 1.45 million to date. Eligible small businesses affected by the flooding can also access grants of $ 5,000 to help with the recovery and reopening process, including repairing damage and helping pay for costs such as lost equipment and of stock.
Annie Kane is editor-in-chief of The Adviser and Mortgage Business.
In addition to writing about the Australian brokerage industry, mortgage market, financial regulation, fintechs and the broader credit landscape – Annie is also the host of Elite Broker and In Focus podcasts and The Adviser Live webcasts. .