Attempts to control the COVID-19 outbreak through social distancing, including strict lockdown measures, are having a dramatic effect on our everyday lives.
The purpose of this post is to let you know about a range of financial options and practical strategies available to you in this challenging economic environment.
From central banks around the globe to domestic institutions within Australia, rapid action is being taken to ease the financial burden on individuals, families and businesses.
In addition to the government’s coronavirus stimulus packages, lenders have begun announcing assistance packages for borrowers affected by the COVID-19 epidemic.
Banks have assured their branches will remain open for business, and that precautions are being taken at each location to protect the safety of their customers.
They’ve also guaranteed they will continue to process loan applications quickly and efficiently and are encouraging consumer and business customers facing hardship due to the virus to reach out to discuss the options available to them.
Here are some of measures currently being rolled out by lenders;
IMPORTANT: Keep in mind these measures are designed to assist people suffering financial hardship. If you can continue to meet all of your financial obligations each month then you should because providing evidence of financial hardship to your lender will likely impair your ability to borrow additional funds from them – at least in the short-medium term when you may need it most. [Update – Credit reporting agencies and lenders have outlined that hardship arrangements are typically not reported as defaults, and therefore do not impact a borrower’s credit score, with APRA also stating that banks need not treat repayment holidays as arrears. Also see ABA comments – click here]
In the current environment having access to between 3-6 months’ worth of mortgage repayments and basic living costs could be critical in the case of a job loss, redundancy or significant downturn in your business.
Here are few thoughts on how you might try and safeguard yourself against a short-term financial challenge;
Since 2011 the cash rate has been cut 16 times, falling from 4.75% to just 0.25%. During this time many customers have opted to put interest savings back into their mortgage, sometimes unintentionally as many banks’ default position is to keep mortgage repayments the same even after an interest rates drop.
As a result many Australians are already ahead on their mortgage, meaning they have funds available in their redraw should they find themselves in a tight financial position.
Should the need arise, it may be possible to refinance and increase the size of your loan to access more of the available equity in your home.
This is good option for people with low LVR loans and those who have seen property values increase since first getting their home loan.
Contact your lender and ask them to lower the interest rate on your home and/or investment loans. Many banks offer better deals to brand new customers so if you have been with your lender for 2 years or more there’s a good chance you could get a better rate.
If your bank won’t or can’t help then you may want to consider refinancing to a new lender with a better rate to lower your monthly repayments.
If you have been making principal and interest payments you may also want to consider switching to an interest only loan to reduce your repayment amount.
As finance brokers we can help you compare all of the available options and make sure you get the best deal. In fact, there has never been a better time to review your loan rates with many lenders providing cashbacks offers of between $2,000-$4,000 to make the switch.
If you find yourself short on funds you may wish to consider a low rate personal loan.
A personal loan can also be used to consolidate any high interest debts [ie. credit cards] into one cheaper and easy-to-manage monthly loan repayment.
An unsecured business loan can be used for any business purpose including the payment of wages or suppliers and even BAS and other ATO obligations.
All you need is an ABN and 6 months in business to apply and you can borrow as much as 100% [often more] of your monthly business income/turnover. Applying is quick and easy and you will usually get your funds within 1-2 business days.
We also have access to private lenders and short term asset loans whereby you can raise funds against any freehold asset of value.
>> For more details on any of these finance options simply email us your enquiry, contact your Urbantech Finance broker or call us on 08 8451 1500 for assistance.
Many small businesses across the country face economic uncertainty as the global coronavirus pandemic bites.
In response, the Federal Government has moved to help support businesses through major economic stimulus initiatives.
For the most current and complete information on what’s available go to www.business.gov.au
We’ve also put together a concise overview of these initiatives here
In order to help small businesses better navigate the tax and super changes made to cushion the economy from the coronavirus, the ATO has updated its website to include some essential information.
The ATO’s coronavirus page provides easy-to-understand and detailed information about giving individuals early access to their superannuation; providing cash-flow assistance for employers; increasing the instant asset write-off, making more businesses eligible; and backing business investment by accelerating depreciation deductions.
Each of the measures have different timings, eligibility and processes. Some will be applied automatically and others will require an application, so we recommend heading to ato.gov.au/coronavirus to understand what is possible.
Here are some of the options available to assist businesses impacted by COVID-19, announced earlier by the Tax Office;
Outside of business, the ATO said it will also work with individuals experiencing financial hardship, and their tax agents, and will apply appropriate tax relief measures for serious and exceptional circumstances, such as where people cannot pay for food or accommodation.
If you’re impacted by COVID-19, and require immediate assistance, you can contact the ATO’s Emergency Support Infoline 1800 806 218.
We obviously need to follow the latest health advice and take the precautions being suggested – however at times like this, it’s important that we don’t panic and continue to go about our business as best we can.
Things are changing daily and new measures are being implemented to soften the economic impact COVID-19.
For Urbantech it is business as usual with no interruptions to the services that we provide. More than ever we remain committed to assisting you with all of your finance needs.
The key message we would like to convey to you at the moment is – you have options should things become more difficult, and we are here to help you.
To that end please don’t hesitate to contact us any time if you are thinking about making a change to your finances. We’re here to answer your questions and take the necessary action to sure up your finances in these uncertain times.
Australian Bank Association – Financial hardship info and measures for all banks
Australian Government [Treasury] – Economic Response to the Coronavirus
Australian Government [ATO] – COVID-19 support available
Australian Government [Services Australia] – Affected by Coronavirus (COVID-19)
Australian Government [Business] – Coronavirus information and support for business
For an update on all the latest and greatest loan rates – click here
For more articles and updates visit – www.facebook.com/urbantechgroup
For more details feel free to call 08 8451 1500 or email us with your query.
Sam, Matt & Andy
PS. We understand many people in the community are self-isolating, quarantined or practising social distancing. I’d like to reassure you that you do not need to leave your home to get financial help. Please reach out to us and we can find a solution that works for you, whether that be via email, phone or a video app.
PPS. Just a final note, it’s not all doom and gloom – in fact, in times of financial uncertainty new opportunities can present themselves whether you’re a property investor, developer or small business owner. Keep a positive mindset, make smart financial decisions and keep an eye out for any opportunities – who knows, rather than just survive, you might even thrive during these difficult times.