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Reprieve for small businesses hit by coronavirus

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Small businesses are set to get a reprieve after the Australian Competition and Consumer Commission (ACCC) gave the go-ahead for banks to defer principal and interest repayments for loans to small businesses affected by coronavirus.

"We consider that this relief package will enable banks to quickly provide relief to impacted businesses, and allow them to keep employing their staff," says ACCC chair Rod Sims.

"Importantly, interim authorisation does not mean that individual banks can't decide to offer more favourable and tailored terms to their small business customers experiencing financial hardship during these times."

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The package will apply to all term loans and retail loans for six months, for small business customers with less than $3 million in total debt to credit providers.

At the end of the six months, businesses won't have to play catch-up at once with a lump sum repayment; either the loan will be extended or repayments increased.

The assistance package will apply to more than $100 billion of existing small business loans.

"As we navigate this unprecedented crisis, it's encouraging to see our banks are taking this proactive approach and leading by example," says Australian Small Business and Family Enterprise Ombudsman Kate Carnell.

"Our small business sector is the engine room of the economy and it urgently needs support."

The authorisation applies to all members of the Australian Banking Association, including AMP Bank, ANZ, Bank Australia, Bank of Queensland Limited, Bendigo and Adelaide Bank Limited, Commonwealth Bank of Australia, HSBC, Macquarie Bank, National Australia Bank, Suncorp Bank and Westpac.

We're cutting through the confusion to help you manage your money during the coronavirus outbreak. Click here for more on how COVID-19 could affect your job, budget, super and investments.

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David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
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