Leading business groups across Australia have called on the major banks to extend further support to struggling businesses during the Covid-19 crisis.
Industry associations spanning the business community acknowledged that lending institutions have already provided assistance, however, more substantial help is needed to keep the economy moving during the current downturn.
Business group including the National Retail Association (NRA), Australian Retailers Association (ARA) and the Pharmacy Guild of Australia (PGA) have detailed a list of options they’d like banking institutions to explore to helps businesses survive the unprecedented set of challenges.
NRA CEO Dominique Lamb said that measures such as six-month interest deferrals were great, but more extensive remedies would be needed to prevent retail businesses from hitting the wall between now and the recovery phase.
“This is an unprecedented economic crisis and every lever available to keep businesses afloat needs to be pulled. Banking institutions have put in place some good measures, but they won’t be enough to stop many businesses and jobs being lost due to the Covid-19 crisis,” Ms Lamb said.
ARA CEO Paul Zahra said “Comprehensive assistance is required to keep the economy moving across all sectors. Retailers understand that banks can’t single-handedly save the economy, but they play an integral role in providing immediate and effective relief to businesses struggling to survive.”
Examples of practical proposals banks can do to help the economy keep moving may include, but are not limited to:
- A freeze on interest accruals on business loans while lockdown restrictions remain in place and for a reasonable recovery period.
- A freeze on interest accruals on personal loans to benefit sole traders while lockdown restrictions remain in place and for a reasonable recovery period.
- A freeze on interest accruals on investments while lockdown restrictions remain in place and for a reasonable recovery period.
- Banks to lower interest rates on business loans until the end of the Covid-19 recovery phase (the first quarter of positive economic growth, following the removal of business restrictions).
- Banks to waive interest for landlords who have been forced to waive rent on properties they own until property owners can collect rent again.
- Banks to waive any establishment or service fees associated with business overdrafts until the end of the Covid-19 recovery phase.
- Banks to lower interest rates on business overdrafts until the end of the Covid-19 recovery phase.
- Banks to waive merchant terminal rental fees for all small and medium-sized businesses until the end of the Covid-19 recovery phase.
