Additional Relief for COVID-impacted Businesses

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.

The ramifications of lockdown orders originating in Sydney can extend beyond the city and even state boundaries, given that New South Wales plays a pivotal role in the national economy. While some truck operators may not have experienced immediate impacts from the ongoing lockdown, the implementation of state border closures is anticipated to introduce increased complexities to the transportation sector's daily operations.

For comprehensive details on COVID safety measures for trucks, you can access further information through this link.

We've consolidated information from various sources to promptly provide our customers with updates on available assistance for those facing challenges due to the ongoing outbreak and associated health directives.

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.

Ann Bligh, the Chief Executive of the ABA (Australian Banking Association), engaged in several media interviews to provide insights into the ABA support package. One noteworthy aspect that may attract significant attention is related to businesses that had opted for loan repayment deferrals during the initial phase of the crisis in 2020. Ms. Bligh clarified that these businesses would not be precluded from availing assistance in the current phase.

Furthermore, she highlighted the focus on customized solutions tailored to the unique circumstances of each customer. Businesses are encouraged to directly reach out to their respective banks for personalized assistance.

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 (Australian Finance Industry Association), emphasizes the importance of reaching out to lenders for assistance if individuals or businesses are facing financial challenges due to the impacts of COVID-19. The AFIA members, as conveyed in the statement, are committed to collaborating with their customers to implement appropriate relief measures that address their specific needs.

Solutions listed include:-

  • Reduction and deferral of loan repayments
  • Fee waivers
  • Restructure and refinance loans
  • Lines of credit or redraw solutions

If we facilitated your truck loan through a non-bank lender and your business is currently facing financial difficulties due to the ongoing outbreaks, regardless of whether you are situated in a designated hotspot or not, we strongly encourage you to get in touch with your lender. Initiating a conversation with your lender will allow you to explore and discuss potential options for managing your loan repayments during these challenging times.

Government Assistance

As per the agreement reached by the National Cabinet, the responsibility for providing assistance to individuals during a state-imposed lockdown rests with the Commonwealth, while the relevant state government is tasked with providing support to businesses.

The New South Wales (NSW) Government has introduced a business support package that will be available from 19 July. This package is initially targeted at businesses affected by the lockdown in the Sydney metropolitan area and surrounding regions. However, there are indications that the support may be extended to cover businesses across NSW. Business owners, whether impacted by the Sydney lockdown or in other parts of the state, are encouraged to remain informed about updates and announcements from 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 are actively providing regular updates on the current situation through our articles. In addition, we are sharing valuable information about important considerations when engaging with lenders for relief packages. It is of utmost importance that you do not delay in reaching out to your lender. Opting to miss payments with the hope that your situation will improve in the near future can have adverse effects on your credit score. Instead, it is advisable to proactively contact your lender to discuss the possibility of a repayment deferral, which typically should not negatively impact your credit score.

If you are contemplating a deferral period, such as a 3-month arrangement, it's crucial to factor in the potential additional interest that may be incurred on the loan. Keep in mind that a deferral effectively extends the duration of the loan by the duration of the deferral period. In most cases, interest would continue to accrue during this time. It's highly recommended that you engage in a candid conversation with your lender before finalizing any decisions. Additionally, you might want to explore alternative options with your Jade consultants, such as considering a short-term overdraft or a business loan to better suit your circumstances. Our expertise in Commercial Vehicle Finance ensures that we can assist you in finding the best solution tailored to your specific financial needs.

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. Refinancing Truck Finance Balloon or Residual can offer valuable benefits by adjusting your loan terms to align with your evolving financial situation and providing you with a more stable footing during uncertain times.

Above all, it is imperative to emphasize, as lenders are urging, that loan holders should not feel the need to navigate these challenges in isolation. Assistance is readily accessible, but you must take the initiative to seek it out.

Contact Jade Truck Loans on 1300 000 003 to discuss all issues around new and existing truck loans.