As the work year gets underway many businesses will be addressing the year ahead against operating in a COVID-safe environment and considering their asset and equipment investment requirements. With the summer holiday season over, individuals may be overviewing their personal finances with a view to a major purchase. If you have current loans or planning to apply, a number of changes and amendments are due to or have already come into effect around lending which we would like to bring to your attention.
COVID-19 Support Measures
During the peak of the coronavirus crisis, the Federal Government initiated a raft of measures to support individuals and businesses on multiple levels. In our position as a lender, one of the most significant was support given to the banking sector to provide payment pauses, loan holidays and repayment deferrals to their customers. This was provided by way of regulatory changes.
Deferrals were approved through 2020 for many SME and consumer loans. Recent media reports have reported statistics that indicate that a significant percentage of both businesses and individuals that requested loan deferrals under these measures have now returned to scheduled payment arrangements.
The regulatory support provided to banks is ending and our lenders have advised of changes to their approach to new requests for repayment deferrals. Essentially the banks will not be offering new repayment deferrals but adopting a more sustainable solution approach to such requests.
For customers with existing deferral arrangements in place, we have been advised that some banks will continue those arrangements through to the end of March 2021.
With the JobKeeper program due to end at the end of March, both businesses and employees who have been benefiting from this scheme may be advised to review their financial situation looking beyond that timeframe. If financial hardship is anticipated as a result of the rollback of JobKeeper or for any other reason, customers should contact their lender to discuss the options available to them.
One of our key banks has advised us directly of their intention to establish workable solutions for SMEs and consumers to replace the deferral option. We would expect others to follow and implement similar approaches. Some banks have established online resources to assist customers with these matters and/or phone numbers are shown on their website to contact the lender by phone.
If a borrower is facing financial hardship, it is always advisable to contact the lender as such a scenario emerges rather than do nothing and default on loans. If you fail to meet designated repayment schedules on either business or personal loans, you risk defaulting on the loan and the goods being repossessed by the lender. In addition, this can impact your credit history well into the future and jeopardise future loan applications.
Changes to Consumer Credit Laws
As part of the Federal budget announcements in September-October 2020, the government flagged its intention to change laws around the issuing of consumer credit. Primarily these changes, which were welcomed by the banking sector, are designed to ease the flow of credit to stimulate the economy and make loans faster to achieve.
The changes were due to come into effect from 1 April and we are staying across developments and will post news as this issue progresses.
The big news as we get into 2021 is that interest rates on consumer loans and business finance look set to remain at low levels for some time. The effect of the vaccine roll-out has seen some volatility on US markets and any delays or issues around vaccinations globally, may effect economies.
Jade Finance is accredited with multiple banks, finance companies and non-bank lenders which places us in a strong position to continue to secure cheap interest rate loans and finance for our customers.
Our lenders include all of the Big 4 banks – CBA, Westpac, NAB and ANZ – as well as finance companies such as Pepper Money, Latitude Finance, GE Money, RACQ and specialist non-bank lenders such as Morris Finance, Selfco Leasing and many others. To see how full lender panel, please check them out on our web pages.
When applying for either business finance or a consumer loan, you don’t have to be an existing customer of a particular bank in order to be eligible to apply for a loan with that bank. Conversely, if you have your transaction account or credit cards with a certain bank, you can still apply to another bank for finance. Jade of course handles that on your behalf, covering off on our extensive lending panel when sourcing loans for our customers.
Both state and territory governments and the federal government have schemes and programs in place for businesses. These take different formats – grants, tax and cost waivers, relief, etc - and are best investigated through the relevant department websites.
To discuss your business or personal loan requirements, contact Jade Finance Call 1300 000 008
DISCLAIMER:THE DATA, POLICIES, INFORMATION, CONTENT AND REFERENCES AS PRESENTED IN THIS ARTICLE IS FOR GENERAL PURPOSES ONLY, IS SOURCED FROM RELIABLE SOURCES BUT NO LIABILITY IS ACCEPTED SHOULD THERE BE ERRORS OR MISREPRESENTATIONS OF DETAILS IN THE CONTENT. THIS INFORMATION IS NOT INTENDED AS THE SOLE PURPOSE OF MAKING FINANCIAL DECISIONS. READERS SHOULD REFER TO A FINANCIAL ADVISOR OR ACCOUNTANT IN THE EVENT THAT THEY REQUIRE PROFESSIONAL GUIDANCE AND CONSULTATION ON THEIR INDIVIDUAL FINANCIAL POSITION.