Banks, non-bank lenders and the Government have all recognised the severity and potential negative widespread outcomes from the current extended Greater Sydney COVID-19 outbreak and responded with relief packages. The message to borrowers from across the lending sector is very clear – you don’t have to go it alone through this. Support packages have been announced by the major lender and bank associations as well as through the NSW Government with talks underway with the Federal Government. While the current stay-at-home health orders apply to the Greater Sydney, Central Coast, Blue Mountains and Illawarra regions, support is being offered on a broader basis.
It is widely acknowledged that the impacts of Sydney-based orders can reverberate across the state and across state borders with NSW the major contributor to the national economy. While many truck operators may not have yet felt any direct impact from the current lockdown, with state border closures being put in place, it is highly likely that the workday is set to become more challenging for the transport sector.
We have compiled information from a number of sources to quickly update our customers on what relief is available for those experiencing difficulties as a result of the current outbreak and health orders.
Banking Association Package
The Australian Banking Association (ABA) has followed up on the initial expressions of support by the four major banks with a major statement issued on 8 July. The ABA represents 22 banks which include the Big 4 as well as many regional and some international banks. The banking sector is a major lender in all financial markets and if your current truck loan is with a bank and you are experiencing financial difficulties due to the current outbreak, you are urged to contact your bank.
Chief Executive of the ABA, Ann Bligh, conducted a number of media interviews that explained and elaborated on the ABA support package. A key point we noted and which may be of particular interest is in regard to businesses that had previously deferred loan repayments during the 2020 phase of the crisis. Ms Bligh stated that businesses that had received repayment deferral during that time would not be prevented from receiving assistance in this current phase.
She also emphasised that tailored solutions were being developed for individual customers and customers should contact their bank.
The general guidelines for assistance from the banks are on a national basis and include:-
- Deferrals of loan repayments for up to 3 months. The loan term would be adjusted in line with the deferral period.
- Packaged available for small businesses with less than $3m in loans and turnover below $5m.
- Support only for business loans that are in good standing, meaning that repayments are up to date or the borrower is in an arrangement with the bank.
While these support measures are targeted to smaller businesses, Ms Bligh said that the banks are also ready to provide support to larger operations with requests for relief addressed on an individual basis.
Finance Association Statement of Support
Many of our truck loans are provided through our extensive non-bank lender network. Many of these lenders are represented by the Australian Finance Industry Association (AFIA) which has also published a statement of relief measures for members’ customers.
In the statement, Diane Tate, the CEO of the AFIA, urges those requiring support as a result of COVID-induced financial difficulties to contact their lender. The AFIA members through the statement intend to work with individual customers to implement suitable relief measures.
Solutions listed include:-
- Reduction and deferral of loan repayments
- Fee waivers
- Restructure and refinance loans
- Lines of credit or redraw solutions
If we arranged your truck loan through a non-bank lender and your business is experiencing financial issues due to the current outbreaks, whether or not you are located in a hot spot, you are urged to contact your lender to discuss your loan repayment options.
National Cabinet agreed that when a state called a lockdown, the Commonwealth would take responsibility for providing assistance to individuals and the relevant state would provide assistance to business.
The NSW Government has announced a package for business that is accessible from 19 July but is on the verge of expanding that support. Businesses either in Sydney and surrounds lockdown or elsewhere in NSW can apply and should stay across announcements from the Treasurer Dominic Perrottet.
Support from Jade Truck Loans
We continue to provide our full range of services so our customers can continue to secure truck finance they require. Construction sites have this time been included in the exposure venues in NSW and this may impact some truck owners. Many will be having to get tested and isolate for at least some period of time. If this process impacts your ability to finalise truck purchase plans, don’t worry. Your Jade consultant will continue processing your loan application and can assist with settlement by liaising between your seller and our lender.
We’re also providing situation updates on a regular basis through our articles. We are also sharing information on considerations when discussing relief packages with lenders. Foremost, it is essential that you do not delay contacting your lender. Missing one or a few repayments as you know things will improve soon, can be detrimental to your credit score. It is preferable to contact the lender and discuss a deferral as this should not impact the credit score.
When considering say a 3-month deferral, take into account the additional interest which may apply to the loan. A deferral means extending the loan period by the number of months in the deferral. In most cases, interest would continue to accrue. Have this conversation with your lender before committing and possibly discuss other options with your Jade consultants such as a short-term overdraft or business loan.
If the ongoing outbreaks are raising lingering concerns for your business, a longer-term solution may be desired. Discuss the possibility of refinancing your existing truck loan to secure a lower and more workable repayment amount which can be sustained over the long term regardless of other impacts.
Most importantly, as the lenders are imploring, there is no need for loan holders to try to get through this on their own. Support is available but you will need to ask.
Contact Jade Truck Loans on 1300 000 003 to discuss all issues around new and existing truck loans.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.