Media Release: Finance Industry Welcomes Additional Government Support for SMEs Through the COVID-19 Crisis

by AFIA

22 March 2020

Finance industry welcomes additional Government support for SMEs through the COVID-19 crisis

AFIA, the Australian Finance Industry Association, representing over 100 providers of consumer, commercial and wholesale finance, has welcomed today’s announcement by the Federal Government of a second package with $66 billion of measures to keep businesses in business, workers in jobs, and a safety net for our economy and community.

Diane Tate, AFIA CEO says: 'The Government’s second package announcement is good news for workers, small businesses, and others in our community, as we all grapple with the immediate and ongoing impact of the COVID-19 crisis in Australia.

'AFIA is working on the detail of the SME announcements with Treasury to ensure the initiatives can be implemented asap and support non-bank lenders to continue to support their customers.

'An important measure announced today is a $40 billion government guarantee scheme to support loans up to $250,000 to SMEs through bank and non-bank lenders.

'Another is a cash payment up to $100,000 for SMEs and not-for-profit organisations to subsidise paying wages to their employees', Ms Tate said.

The government guarantee scheme is targeted to provide unsecured loans to SMEs to be used for working capital purposes and will be available from 1 April 2020. The unsecured loans will be 50% guaranteed by the Government and will be repayment free for 6 months. The scheme will apply to new and existing customers of banks and non-bank lenders.

'The Government’s announcement today will help keep people in jobs over the coming weeks and months and builds on the announcement made last week to invest up to $15 billion through the Australian Office of Financial Management (AOFM) to enable customers of smaller ADIs and non-bank lenders to get the cash flow support and hardship assistance they need right now.

'Many workers and businesses have already been significantly impacted by the COVID-19 crisis, with existing travel restrictions and social distancing measures in place in Australia and the Government indicating stricter measures are likely to be introduced.

'The COVID-19 crisis will impact all Australians, our economy, and our society. It is important for all lenders – the major banks, smaller banks, finance companies and fintech lenders – to do their bit and support their customers through the COVID-19 crisis, response and recovery.

'AFIA members have been making changes to their business models consistent with their business continuity plans to ensure they can continue to provide the products, services and assistance their customers need during this unprecedented time.

'We encourage customers to talk to their lender asap about the options available to them if they are experiencing financial difficulties due to the impact of COVID-19', Ms Tate said.

AFIA members are determined to ensure Australia’s finance industry continues to:

• Promote simple, convenient, innovative and affordable credit
• Foster competition and innovation in Australia’s financial services industry, and
• Remain agile and innovative in supporting consumers and small businesses increase their financial and economic participation as quickly as possible.

Media enquiries:

Vanessa Puli
Executive Director, Communications
0429 238 613
vanessa.puli@afia.asn.au

Notes to editors:

AFIA members are financing Australia’s future. AFIA represents over 100 providers of consumer, commercial and wholesale finance in Australia. These banks, non-bank lenders, finance companies and fintechs provide specialised finance to meet the needs of businesses through right-sized and best-priced products, services and technologies that help mobilise working capital, cashflow and investment. They are also at the forefront of financial innovation in consumer finance.

AFIA members are a fundamental part of Australia’s competitive and innovative financial services industry. These specialised lenders promote simple, convenient, innovative, and affordable credit. This activity supports financial and economic participation by consumers and businesses, improving social participation and financial wellbeing and supporting the economic success of our nation.