The Four Rs of working with lenders to take advantage of the banks’ deferral policies

2 April 2020

These are unsettling times for households and businesses. Financial stress is being felt across the board as the impacts of COVID-19 ripple through our community.

Fortunately, for both businesses and households, there are a number of ways you can work with your lender to help ensure you’re able to survive this crisis and recover out the other side.

As we work through each client’s situation, the Findex Lending team have implemented a process called Review, Restructure, Refinance, Replace – The Four Rs. This process is designed to assist our clients to understand their current position and lending arrangements and reposition to maximise the support and resources available to them.

The Four Rs

1. Review

  • What government incentives are available (personal and business)?
  • Your current spending and expenses and apply for discounts, waivers and reductions where possible.
  • Your finances. What loans do you have? What is the rate of interest and repayments?
  • Your eligibility to access some of your Superannuation (up to $10,000 per annum).
  • Review your insurances – if your premises are unoccupied, make sure you have cover. Check if there are any options to defer payments on your policy.
  • Review any Business Insurances – there may be changes that can be made to reduce premiums (already paid).
  • Consider any hardship provisions and opportunity to defer payments with your own personal insurances (life insurance, income protection, trauma).

2. Restructure

  • Reduce unnecessary spending.
  • Reduce your loan repayments (with rates reducing over the past 12 months, you may be paying a higher amount then is required).
  • Apply for relief.
  • Apply for new Government Guarantee business loan.
  • Consider Trade Credit Insurance if you are still operating and taking on new customers.

3. Refinance

  • Check the market for better offers and/or better terms.
  • Consolidate loans and credit cards.
  • Consolidate any business loans, equipment or car loans.

4. Replace

  • With government tax incentives, it may be a good time to replace that piece of equipment:

- Take the accelerated depreciation benefit.

- Receive better terms of new loan (rates have reduced).

- Cash in old equipment and place proceeds in cashflow.

  • Consider key man protection for key employees, who have come to the fore during this period. They are hard to replace, and their loss may have a significant impact.

Most lenders have support and assistance packages in place for their clients. The landscape is moving so quickly and policies are evolving each day so it’s important to consult with your Lending Adviser to understand and access the latest support and assistance available to you.

To help better understand the type of support that may be available, we have listed the deferral policies available from the major banks. If you’re with another lender, please visit their website where information will be available.

ANZ deferral policies

Residential

  • Reduced rates on home and investment loans.
  • Request a deferral for up to six months, with review at three months. Note, your interest is capitalised.

Business

  • Decreased lending rates.
  • Businesses can request a six-month loan deferral with interest capitalised.
  • Availability of temporary overdraft increases for 12 months.
  • Details of Government Guarantee Loan not yet announced.

Equipment

  • Defer for up to six months or restructure Equipment Finance loan repayments and/or terms.

Commonwealth Bank deferral policies

Residential

  • Reduced rates on home and investment loans.
  • Request a deferral for up to six months. Note, your interest is capitalised.

Business

  • Decreased lending rates.
  • Businesses can request a six-month loan deferral with interest capitalised. Automatic approval is granted until 1 July 2020 and then a further extension of three months can be obtained.
  • Access the Government Guarantee Business Loan of $250,000. No repayments for the first six months at a rate of 5.5%, and then principal and interest over two years and six months remaining, at the lower rate of 4.5%. There are no fees to apply although a COVID-19 Risk Plan may be required.

Equipment

  • Defer for up to three months or restructure equipment finance loan repayments and/or terms.

National Bank deferral policies

Residential

  • Reduced rates on home and investment loans.
  • Request a deferral for up to six months. Note, your interest is capitalised.
  • Confirmed spots under First Home Loan Deposit Scheme

Business

  • Decreased lending rates
  • Businesses can request a six-month loan deferral with interest capitalised.
  • Defer business credit card payments.
  • Access the Government Guarantee Business Loan of $250,000. No repayments for the first six months and then principal and interest over two years and six months remaining, at rate of 4.5%. There are no fees to apply but a COVID-19 Risk Plan may be required.
  • Additional opportunity of further unsecured lending, subject to criteria.

Equipment

  • Defer for up to six months or restructure equipment finance loan repayments and/or terms.
  • Simplified equipment replacement process.

Westpac deferral policies

  • A special Term Deposit rate for 12 months offered to investors with an improved rate for over 65-year-olds.

Residential

  • Reduced rates on home and investment loans.
  • Request a deferral for up to six months. Note, your interest is capitalised. Initial term is three months with extension of three months by application.

Business

  • Decreased lending rates.
  • Businesses can request a six-month loan deferral with interest capitalised.
  • Merchant deferral of fees for three months.
  • Details of Government Guarantee Loan not yet announced.

Equipment

  • Defer for up to six months or restructure equipment finance loan repayments and/or terms.

Macquarie Bank deferral policies

Residential

  • Reduced rates on home and investment loans.
  • Request a deferral for up to six months. Note, your interest is capitalised.
  • Fees to restructure waived.
  • Request a deferral of six months on personal loans and credit card payments. Note, your interest is capitalised.

Business

  • Decreased lending rates.
  • Businesses can request a six-month loan deferral with interest capitalised.
  • Details of Government Guarantee Loan not yet announced.

Equipment

  • Defer for up to six months or restructure equipment finance loan repayments and/or terms.

Bendigo Bank deferral policies

Residential

  • Reduced rates on home and investment loans.
  • Request a deferral for up to six months. Note, your interest is capitalised.
  • Fees to restructure waived.

Business

  • Decreased lending rates.
  • Businesses can request a six-month loan deferral with interest capitalised.
  • Fee waivers to consolidate or restructure loans.
  • Waive Merchant Terminal Fee for three months.
  • Details of Government Guarantee Loan not yet announced.
  • Rural Bank is helping impacted Agribusiness customers.

Equipment

  • Defer for up to six months or restructure equipment finance loan repayments and/or terms.

If you need support with ANY Bank, or just need someone to talk to about options, please contact the Findex Lending team today.

Findex has developed a Government Stimulus Health Check and free Business Wellbeing Toolkit to help businesses manage potential risks and take full advantage of eligible stimulus assistance. Book your Health Check here.