FAQ: What Help Are Banks Offering During the Pandemic? - What to Know
With COVID-19 causing chaos around the world, many stores are forced to either close or to drastically change the way they handle their operations for the time being. While this is extremely unfortunate for businesses that have had to be closed down, the businesses that are still open are also at risk of closure as the lack of profit or income streams make it difficult to keep operations running.
Have a business that needs financial help in this pandemic? Fortunately for you, banks are still here to lend a helping hand. Here are a few questions you might have that we'll try to answer:
1. Are banks closed down?
Banks are essential services, and as such, most banks remain open in this pandemic. However, just because banks are open doesn’t mean you should be leaving home for the most basic of bank errands. Heading out to an area with a high concentration of people is only asking for trouble.
Even the banks themselves highly recommend that you utilize online banking or banking applications to promote self-isolation as much as possible.
2. How can banks help businesses?
Thanks to the pandemic, banks in Australia will allow small companies to delay their repayments on their outstanding loans. Also, banks are offering additional loans that will not come with any repayments for the first six months. Other kinds of help banks are offering to help get everyone through the current situation are waived fees, extended repayment deadlines, and restructured loans.
3. Do large businesses get help?
If your business assets all rack up over $10 million, you'll be considered a large business. Generally, you'll still be able to defer loan repayments for up to six months, similar to small businesses. Additionally, banks are becoming much more flexible when it comes to the terms and conditions on their loans. So, with some discussion, you can get a loan that puts the minimum amount of burden on your shoulders to get your business through the pandemic.
4. How can I, as a business, get help?
You'll need to figure out if your business can be labelled as a “small business.” However, because the definition varies from place to place, the first thing you should do is to contact your bank and ask.
If you're deemed eligible for assistance, opt-in for the type of help you need. The bank will do its best to respond and approve of your request quickly.
5. How can I borrow money?
If you want to borrow money from the bank, remember that you still need to fall under the criteria that’s been laid out by the bank itself.
As previously mentioned, if you are given a loan, you won't have to worry about any repayments for six months. You also don't have to make any interest payments either within the same period, although it will still be accrued and must be paid off later.
6. Will this affect my credit rating?
Do know that all these loan restructures and repayments can be recorded in your credit history. However, this record is meant to be fair, as such it may list the reason for such actions is due to the global pandemic.
In these difficult times, banks are ready to help and ensure your business remains in operation during and post-pandemic. If you need help staying afloat, don’t be afraid to contact your local banks. Remember, you aren't the only one in trouble, and these banks are more than willing to help you get you through this tough time.
All the best during this pandemic! If you require an accountant in Australia to help get your finances together, we're here for you. Get in touch with us and let us know how we can help.