Legal Home Loans

COVID-19 Financial Relief

The Government, the Reserve Bank of Australia (RBA), and the Australian Prudential Regulation Authority (APRA) have implemented credit measures to try and limit the economic damage by the COVID-19 pandemic to individuals and businesses.

UPDATE as of 12th July 2021: The ABA have announced that banks have launched an extended national relief package for businesses and consumers hit by COVID-19 restrictions, including support around home loans. Australian banks will support customers by way of loan deferral options, assessing affected customers on a case by case basis. Whilst not every bank is offering the same support, assistance out there includes:

  • Home or personal loan repayment deferrals or reductions, interest rate reductions and loan term extensions.
  • Credit card repayment and interest rate reductions for a period of time.
  • Reduced or deferred repayments on asset and equipment finance and eligible business loans.
  • Business loan restructuring with no fees incurred.
  • Referrals to financial counsellors or other support services.
  • Eligible customers may be able to access low interest rate business loans through the federal government’s SME Recovery Loan Scheme
  • Fee waivers across a range of products.
  • Restructuring of debt.
  • Referrals to financial counsellors or other support services.

For new home loans:

  • New applications for residential loans are still being accepted, with many banks now accepting digital verification of Identity;
  • Some banks are experiencing processing delays, however our team are working closely with lenders to expedite applications wherever possible;
  • The interest rate is being held at a historic low of 0.10%, thereby increasing your borrowing capacity.

For businesses:

The Government has extended business tax incentives and loan guarantees to support investment and cash flow as Australia’s economy continues to recover from COVID-19.

Instant Asset Write Off (IAWO):

The 2021-22 Budget extended the IAWO for an additional year until 30 June 2023. This will allow projects with longer lead times or that are experiencing COVID-19 related supply chain disruptions to be eligible for this

SME Recovering Loan Scheme:

The Government’s SME Recovery Loan Scheme is designed to support the economic recovery, and to provide continued assistance to firms that received JobKeeper and businesses that have been impacted by the floods in eligible LGAs. The Government will work with lenders to ensure that eligible firms will have access to finance to maintain and grow their businesses.

Key features of the Scheme include:

  • An 80% government guarantee;
  • Permitting borrowers to refinance existing loans into the Scheme, including those from the SME Guarantee Scheme;
  • Allowing lenders to offer a repayment holiday of up to 24 months
  • A 7.5% interest rate cap;
  • A maximum loan size of $5 million; and
  • A maximum loan term of ten years.

The Scheme commences on 1 April 2021 and closes for new loans on 31 December 2021.

Quick and efficient access to credit for small businesses: 

The Government is cutting red tape by providing a temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers. This reform will help small businesses get access to credit quickly and efficiently. This exemption will be made permanent as part of a broader package of reforms to Australia’s lending laws, commencing 1 March 2021, which will remove the ambiguity in lending laws to allow small businesses get access to credit simpler and faster.

Despite working from home arrangements, business operations continue as normal for Legal Home Loans, banks and lenders. Legal Home Loans are here to help you navigate and coordinate these facilities during this period of uncertainty and economic risk.

Speak to us to coordinate working capital, overdraft facilities, new loans, or to restructure existing finances and mortgages.

Click here to contact us today for support.