In response to growing concerns from owners and small business owners amid the COVID-19 epidemic, the Australian Banking Association (ABA) announced that banks and lenders will extend the delay six-month loans to owners of commercial properties.
According to the ABA, the support will apply to an additional $ 100 billion in business loans. This means that the six month deferral of loan payments will apply to loans of up to $ 250 million. In addition, additional money will be available for companies in difficulty.
"This will help protect several thousand small businesses from eviction if they have difficulty paying rent, as it covers about 90% of commercial property owners who have loans from an Australian bank", said ABA CEO Anna Bligh.
Bligh said banks are extending support to an additional 30,000 businesses by increasing the threshold, which allows them to defer payments for loans up to $ 10 million.
Commercial owners of properties such as local malls, pubs, clubs and restaurants will be able to apply for this assistance.
[Whenlandlordswithinthisthresholddotherightthingbytheirtenantsthebankswilldotherightthingbythem"Blighsaid
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While the new measures will apply to all sectors of the economy on an opt-in basis, the following conditions must be met:
For commercial property owners, they agree to the bank that during the interest capitalization period, they will not terminate leases or evict existing tenants for rent arrears due of COVID-19.
Company reported company was affected by COVID-19
The company was up to date in terms of existing facilities 90 days before applying
Interest is capitalized – this means that the term of the loan is extended or that payments are increased after the deferral period.
Ken Morrison, general manager of the Property Council, said these loan relief measures will play a crucial role in helping these landlords support tenants affected by the coronavirus epidemic.
"Business owners want to do the right thing by their tenants and have a great interest in helping them get through this crisis. They also need help in meeting their own obligations, so that the banks' decision to offer deferrals is important, as is the agreement not to apply business loans for non-financial breaches of the loan agreement, "said Morrison.
In addition, he said this assistance would help business owners to close the gap resulting from the six-month moratorium on commercial and residential evictions.
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However, Morrison said that the government must also do its part to help businesses.
Adrian Kelly, president of the Real Estate Institute of Australia, said that the government's moratorium on evictions does not take into account that property owners and agents will also be affected by the current crisis.
"We need to turn to agent support so that what the Prime Minister wants, in terms of landlords and tenants – finding a way out of the crisis, can be achieved," said Kelly. "Real estate agents will work very hard to facilitate the role between the landlord and the tenant, and to do this they need income."
Read also: Wish list of owners in the middle of COVID-19
Damian Collins, president of the Real Estate Institute of Western Australia, echoes Kelly's feelings, adding that some businesses not affected by the epidemic should continue to pay rent.
"We are living in all these difficult times together. Just as the owners and the government will come together to help struggling tenants, it is essential that those who are still in a solid position continue to do their part and pay their rent. . ", he said.
Collins said there was a need for rent assistance to help tenants continue to pay the rent. He said many owners are "mom and dad investors" who are also affected by the epidemic.
"Landlords cannot be left to finance the non-payment of rent themselves. It is essential that the government follow up on this announcement tonight and provide rent assistance directly to landlords when A tenant is legitimately unable to pay, "he said.
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