Banks extend loan deferrals program for small business

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has welcomed the decision by the Australian Banking Association (ABA) to extend its loan deferrals program for small businesses that are still struggling in the midst of the COVID-19 crisis.

The ABA stated that banks will extend deferred loans for an additional four months, with 800,000 borrowers – who have borrowed around $260 million – potentially benefiting from the move.

The extension has been ratified by the Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investments Commission (ASIC), both bodies having committed to help businesses severely impacted by the pandemic.

“Small-business owners who have been worried about how they will repay their loans come September, will be breathing a huge sigh of relief today,” Carnell said.

“I would encourage small businesses who are experiencing financial difficulties, to call their banks now to make the necessary arrangements.

“With hundreds of small businesses now facing another devastating six weeks of lockdown in parts of Victoria, it’s clear that this is not over and the path to recovery will be prolonged.

“As we navigate this unprecedented crisis, it’s encouraging to see our banks are taking this proactive and flexible approach,” Carnell added.

“We want to see as many small businesses survive this difficult time as possible. The ABA announcement…is an important piece of that puzzle.”

This article was first published on Inside Small Business, a sibling website to Inside Franchise Business Executive.