Australia's banks have agreed to allow small business customers to suspend loan repayments for six months to help cushion the blow of the economic fallout from the coronavirus.
The assistance package, announced by the Australian Banking Association today, is designed to provide a lifeline to small businesses impacted by coronavirus.
Relief package for small businesses
Australian Banking Association CEO Anna Bligh said, "the Assistance Package will apply to more than $100 billion of existing small business loans, and depending on customer take up, could put as much as $8 billion back into the pockets of small businesses as they battle through these difficult times."
Banks are putting in place a fast track approval process to ensure customers receive support as soon as possible. What was initially a health crisis has rapidly evolved into an economic concern, with some small businesses already beginning to suffer devastating impacts.
Banks have been working closely with the Treasurer and Government over the last few days to identify measures to support the economy. "Small businesses can rest assured that if they need help, they will get it. Banks are already reaching out to their customers to offer assistance and packages will start rolling out in full on Monday," Bligh said.
Shares in the big four banks have regained some of the ground lost over the last few weeks this morning. Australia and New Zealand Banking Group (ASX: ANZ) shares were up 5.40% to $15.81 at the time of writing, albeit still down 40% from February highs.
Commonwealth Bank of Australia (ASX: CBA) shares are up 3.76% to $63.24, which is 30% lower than February highs. Westpac Banking Corp (ASX: WBC) shares are down 39% from February highs, but up 7.71 % this morning. Meanwhile, National Australia Bank Ltd (ASX: NAB) shares are up 6.79% this morning, although still down 43% from February highs.
The Small Business Relief Package was developed following discussions with APRA and ASIC to provide the appropriate regulatory treatment and is subject to authorisation by the ACCC.
Bligh commented, "small businesses are the most vulnerable part of the economy and have the most urgent need for assistance. Small businesses employ 5 million Australians and this package is designed to help them keep doing just that."
