Guide to Australia's coronavirus financial support for small businesses

As the coronavirus outbreak grows more severe day by day in Australia, many businesses are struggling to keep afloat and keep their doors open. To support small businesses during these tough times, both the government and banks have stepped in with emergency financial relief strategies. 

“We want to help businesses keep going as best as they can and for as long as they can, or to pause instead of winding up their business. We want to ensure that when this crisis has passed Australian businesses can bounce back,” Prime Minister, Scott Morrison said. 

The federal government’s rescue packages focus on boosting cash flow for business owners and easing their access to working capital.

Meanwhile, major and smaller lenders, including members of the Australian Banking Association (ABA), are offering their business banking customers support ranging from waived fees to deferred business loan and overdraft repayments.

If your business operations have been affected by the COVID-19 pandemic, here’s a snapshot of how the government and your bank could help lighten your financial burden. We’ve also put together details on how you can access these relief measures to get the ball rolling as soon as possible.

Australian Government 

To date, the government has announced two multi-billion dollar coronavirus stimulus packages to help cushion the economic impacts of COVID-19. Small businesses can expect the following forms of financial assistance: 

Cash flow boost

Under this scheme, eligible small to medium businesses and not-for-profit charities who employ workers and have an annual turnover under $50 million will receive tax-free payments of at least $20,000 up to $100,000.

These tax-free payments will help cover operational expenses including rent, electricity and staff costs. They’re expected to benefit 690,000 businesses employing around 7.8 million people and about 30,000 not-for-profits. 

Payments will be equal to 100% of the tax that businesses withhold from their employees’ salary and wages, capped at $100,000. Or if your business isn’t required to withhold tax, then you’ll receive the minimum payment of $20,000. 

How to access: The payments will be automatically credited to your Business Activity Statement (BAS) by the Australian Taxation Office (ATO). They will arrive in two rounds - the first half from 28 April 2020 and the second half from 28 July 2020. 

Apprentice wage assistance 

Small businesses with fewer than 20 employees will receive up to $7,000 each quarter for every currently employed apprentice, capped at $21,000. It’s hoped that this will assist businesses with paying wages for up to nine months to help trainees and apprentices stay employed. 

How to access: Register for the wage subsidy from early April 2020, with final claims for payment to be lodged by 31 December 2020. For further information on how to apply for the subsidy, contact an Australian Apprenticeship Support Network provider. 

Instant asset write-off expansion 

The government will also spend over $700 million to increase the instant asset write-off, with an aim of encouraging more businesses to buy big-ticket items (e.g. cars, equipment). 

The instant asset write-off is an initiative that allows small businesses to claim instant deductions on business purchases of up to $30,000. But now, this $30,000 threshold will be raised to $150,000 for businesses with an annual turnover of under $500 million.

How to access: You can claim the instant write-off from the ATO during tax time, as long as you make the purchase before 30 June 2020 (end of the financial year). 

Business loan guarantee 

To help small businesses gain access to working capital, the government will guarantee 50% of new business loans issued by participating lenders.

Under the Coronavirus Small to Medium Enterprises (SME) Guarantee Scheme, businesses with a turnover less than $50 million will be able to secure a maximum loan amount of $250,000 on terms of up to three years. These loans will be unsecured, and repayment-free for six months. Plus you won’t have to pay an additional fee for accessing the scheme. 

How to access: Contact your bank or check their website to see if they offer loans under the Coronavirus SME Guarantee Scheme (available from April until 30 September 2020). The decision on whether you qualify for the extra credit rests with the lender. 

Find out more about the government's coronavirus support for small businesses.

The Big 4 Banks

Commonwealth Bank 

CommBank is ramping up financial support for its business banking customers. Following the emergency RBA rate cut, it announced a 1.00% reduction from all existing cash-linked small business loans, effective from 3 April 2020. The big bank is also participating in the government’s Coronavirus SME Guarantee Scheme, offering unsecured loans of up to $250,000 at a lower interest rate of 4.50%, with no establishment or ongoing account fees and repayments required for up to six months. Other relief options for business customers include: 

• Deferring repayments on eligible business and equipment finance loans for up to six months (automatic deferral from April to June 2020, with the ability to opt in for an additional three months if needed)

• Waiving merchant terminal fees for three months 

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

How to access: Call your dedicated CommBank relationship manager, or Business Financial Assistance Team on 13 26 07.

NAB 

In the wake of the latest RBA cut, NAB business customers will see reductions of 1.00% for variable small business loans, and decreases of 2.00% for new QuickBiz loans and all overdrafts (effective from 30 March 2020). NAB will also partake in the government’s Coronavirus SME Guarantee Scheme, offering unsecured loans of up to $250,000 at 4.50%. To further boost business cash flow, NAB is offering relief such as: 

• Deferring business loan repayments and extending business loan terms (both up to three months), depending on individual circumstances

• Assistance with restructuring existing business loans (including equipment finance)

• Deferring business credit card repayments

• Waiving terminal rental fees for up to six months 

How to access: Business customers experiencing financial hardship should get in touch on 1300 769 650. Alternatively, you can contact your Relationship Banker or the Small Business banking support team on 13 10 12.

Westpac

To help new and existing business customers through these uncertain times, Westpac will slash 2.00% from overdrafts and 1.00% from variable small business cash-based loans (effective from 6 April 2020). Like NAB and CommBank, Westpac has responded to the government’s Coronavirus SME Guarantee Scheme by offering unsecured three-year loans of up to $250,000 to all businesses with a turnover of less than $50 million (plus a six-month repayment-free option). Other support for struggling business customers includes: 

• Deferred business credit card payments for up to three months

• The ability to terminate a term deposit without penalty

• Fee-free redraws on loans

• Restructuring and consolidation loans 

How to access: For further assistance or to check your business eligibility, call the Financial Hardship Assistance Line on 1800 067 497. 

ANZ

ANZ’s coronavirus support package involves a 0.25% reduction in variable small business loan rates, effective from 27 March 2020 (this brings the big bank’s total rate cut in March to 0.50%). Moreover, since 3 April, fixed 2-year and 3-year rates for its secured business loans of up to $1 million have dropped by 80 basis points to 2.59%. Besides rate slashes, affected businesses can also access: 

• Deferred loan repayments for six months, with interest capitalised

• Temporary increases in overdraft facilities for 12 months 

How to access: Business customers can talk to their relationship manager or ring ANZ on 13 13 14. 

Smaller lenders 

Bankwest 

To ease the financial strain on business customers, Bankwest has joined the government’s Coronavirus SME Guarantee Scheme in addition to launching its very own coronavirus support package, with measures such as: 

• Deferred repayments on business loans, vehicle and equipment finance loans and home loans held by the customer
• Waived merchant terminal rental fees for 90 days
• Waived early prepayment fees on business term deposit accounts (including Farm Management Deposit accounts) 
• Tailored restructuring options 

How to access: Give Bankwest a ring on 13 70 00 or talk to your relationship manager. 

Bendigo and Adelaide Bank 

Bendigo and Adelaide Bank is also part of the government’s Coronavirus SME Guarantee Scheme. Plus, it has announced that eligible business customers with facilities up to $10 million will be able to defer business loan repayments for six months (with interest capitalised). 

In addition, the bank is providing support through interest rate cuts across secured and unsecured loans (1.00% and 0.75% reductions respectively), along with a relief package offered on a case-by-case basis: 

• Waived fees for structuring or consolidating loans

• Waived rate reductions for early withdrawals on term deposits

• Deferred repayments or term extensions

• Waived merchant terminal fees for three months

How to access: Speak to your business banking relationship manager, contact your local branch, or call 1300 236 344 to get your finances sorted. 

Heritage Bank 

Likewise, Heritage Bank is participating in the Coronavirus SME Guarantee Scheme on top of offering its own COVID-19 relief measures for business customers, including: 

• 1.00% rate reduction across all business banking lending (except SMSF and credit cards), effective 1 April 2020
• Deferred business loan repayments for up to six months, with interest capitalised
• Waived arrears fees and default fees for lending products for six months
• Early redemption of term deposits and farm management deposit accounts, without fees or penalties 
• Additional working capital and loan restructures available

How to access: Call Heritage Bank's Queensland-based 24/7 Contact Centre on 13 14 22. Existing customers can contact their Business Banking Manager. 

Suncorp

Suncorp is also helping business customers across Australia navigate the impacts of COVID-19 by providing assistance in the form of: 

• Reducing interest rates for new and existing variable business loans (secured)

• Lowering small business overdraft and line of credit rates by 0.30%

• Removing various fees from business deposit accounts

• Deferring loan repayments for six months, with interest capitalised

How to access: Get in touch by contacting your relationship manager or calling 13 11 55. 

Other banks offering financial support

Even if your lender hasn’t introduced a designated COVID-19 financial relief package or initiative, they will most likely have hardship policies in place to help you cope with the impacts of the pandemic. Start your search at the ABA’s financial difficulty page. It provides general information as well as relevant contact details of all its 22 members. Or if you’re not banking with an ABA member, hit the search bar to find your lender’s financial hardship assistance phone number and keep an eye on any announcements they’ve made regarding the coronavirus. 

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