In previous updates on Covid-19 and how the Government is helping to alleviate business pain, we have covered initiatives such as the JobKeeper Scheme, SME Guarantee Sheme and various Stimulus Packages.

A large percentage of overheads for most business owners is on fixed costs such as rent and interest repayments. Today we’d like to highlight the Governments position on what they are doing to relieve the pressure on two areas: commercial rent and business loans.

Commercial Rent

On the 29th March 2020, the Federal Government announced that “states and territories will be moving to put a moratorium on evictions of persons as a result of financial distress … for the next six months”. Meaning landlords are prohibited to evict tenants for the next six months due to financial distress. PM Morrison urged tenants and landlords to “sit down, talk to each other and work this out”. This announcement is aimed at helping businesses re-emerge on the other side, not weighed down by excessive debts caused by rental arrears.

The proposal is to approach your Landlord and try to agree on an interim solution which is fair on both parties.

What does this mean for commercial property landlords?

The Australian Banking Association has announced “Yes, commercial property landlords can get relief as long as you provide an undertaking to the bank that for the period of the interest capitalisation, you will not terminate leases or evict current tenants for rent arrears as a result of COVID19”. Simply put, Banks will provide a six-month repayment holiday to help landlords navigate their way through the financial impact of Covid-19.

Business Loans

To support customers through this time of uncertainty, Australian banks are stepping up with more clearly defined financial relief strategies. In an official Australian Banking Association statement, CEO Anna Bligh said “Banks stand ready to support customers and if anyone is in need of assistance, they shouldn’t wait but come forward as soon as possible.”

At this stage banks are offering differing levels of relief, including payment deferrals, reduced interest rates, increased overdraft facilities, waiving of fees, restructured loans or extensions.

Contact your financial institution to enquire about what you are entitled to. You can click here for more information on relief offered by different lenders.

Conclusion

It is crucial that during these tough times business owners’ avail of the help which is on offer. Working with your financial institution, Landlord and the Government is the key for survival in this economic climate.

Let Us Help

If your business has a turnover of over $1 million, ABJ Solutions is offering a complimentary 30 minute Zoom meeting to help answer questions and model critical decisions with you. Get in touch with us today so that we can help guide you through this challenging time.