Reaching out to your bank or landlord for support

 

Reaching out to your bank or landlord for support

In this unprecedented rapidly evolving global pandemic, government, business and the community are being pushed in real time to face the immediate short term impacts.

2020-03-19

Notwithstanding various stimulus packages being announced and interest rate cuts, we know that many in the SME sector and smaller corporates are likely to be facing cash flow challenges as a result of flow-on economic impacts from the pandemic.

Business owners and those in charge of operations and finance may also be concerned about how they will continue to satisfy their bank loan covenants on an ongoing basis, or to meet their loan repayments.

Further, we recognise that many businesses will be concerned about their commercial rent obligations, or, if they have made decisions to have their staff work from home, they may wish to seek rent relief for a period.

When engaging with your lenders, keep in mind the following:

  • If you’re on principal & interest loan repayments, ask your financier for a period of interest only as a first step

  • Alternatively, seek to extend your loan term

  • Understand where your loan-to-valuation ratio sits and potentially offer the bank more security cover to sweeten the deal for them and increase your chances of them being more flexible

As we look to find ways to support each other during this time, we believe this assistance could provide some peace of mind.

How we can help you

Our team has hands-on experience in working in Australian banks and engaging daily with banks and other financiers on behalf of clients.

We know, that it is always better to be proactive with your bank or your landlord when facing cash flow uncertainty and business challenges, particularly in times of broader economic stress.

Our experienced and approachable team can help you:

  1. Navigate discussions with your bank and with your commercial landlord.

  2. To renegotiate your bank loans / facilities in need, through our partner team and also via our external debt advisory service.

  3. With cash flow reforecasts to support your decision-making around cost cutting and ongoing business solvency tests.

 


Snapshot of Big 4 Bank support

Each of Australia’s Big 4 banks have outlined their current position on supporting their customers. We share this snapshot with you below.

 

ANZ

Financial support available includes:

  • Suspending interest repayments

  • Early access to term deposits without incurring break fees

  • Access to additional credit subject to approval.

CBA

Support through:

  • Deferring repayments on business loans and overdraw products, for 90 days

  • Deferring repayments and fee waivers for various products

  • Adding additional resourcing and extended hours to ensure faster commercial lending decision time

  • Waived merchant terminal fees for impacted customers with CommBank payment terminals, for 90 days

  • Deferring repayments on vehicle and equipment finance loans, and tailoring restructuring options to meet individual customer needs

  • Waiving early redraw fees on business term deposit accounts (including Farm Management Deposit accounts)

  • Waiving establishment fees and excess interest on Temporary Excess products

NAB

For business customers needing some extra support, this could include measures such as:

  • Deferral of business loan repayments for up to 3 months, assessed on a case by case basis

  • Extension of a business loan term by a period of up to 3 months, where individual circumstances warrant

  • Support to restructure existing business loans, including equipment finance

  • Business credit card deferred repayments.

Westpac

Support measures for business customers impacted by COVID-19 and related disruption to trade and cash flow. COVID-19 support measures may include:

  • Fee free redraws

  • Business loan deferred repayments up to 3 months

  • Option to extend Business Loan term by up to 3 months

  • Restructuring and consolidating loans

  • Access to term deposit funds without reduction in interest rate

  • Deferred payments for Business Credit Cards

  • Business Financial Counselling access

  • Merchant terminal rental fee waivers for up to 3 months

  • $0 establishment fee for equipment finance loans

 

 Information sourced from each Bank’s website.

  

Danny Armstrong

E darmstrong@shinewing.com.au

Daren McDonald

E dmcdonald@shinewing.com.au

 Josie Caia

E jcaia@shinewing.com.au

Dale Sloman

E dsloman@shinewing.com.au