A ‘fewer questions asked’ (if not all that easy to access) overdraft from Westpac for small business customers is a nice twist - as far as A$15,000 goes.
Nicer still is that on the bank’s 45 day interest free terms this is around eight times the daily allowance paid out to those staggering along on the dole.
Centrelink and Newstart and now this new Westpac working capital line for SMEs. Label it all charity, income transfers better.
The most prominent and dominant names in finance in Australia are burning shareholder value as they offer forbearance, deferrals, fee waivers and a little of the free credit so desperately needed to prop up Australia’s balkanised and yes, still lawless megacity Sydney.
The greater Sydney Covid lockdown has another 10 weeks to run, Kos Samaras, a Melbourne social and health researcher wrote in a Facebook post yesterday. Samaras is the principal of Redbridge Consulting and former assistant secretary of Victorian Labor.
Ten weeks is twice as long as the disoriented NSW Coalition government can stomach and disorder on the part of the people (feeding dissent, also) means there are few smoother options, which might lift the lunacy by the end of August, if we are lucky, which it seems we are not.
The decay of business credit quality in Australian banking is pivoting from dreadful to dire under the deadweight of the Delta outbreak in Sydney and the constrained supply of Covid vaccines.
The industry is short on prospects for under-provisioning; there will be no rerun of 2020 sophistry in bank financial reporting as the industry profit season unfolds over the next month.
SMEs have lived on denial, debt and determination since the COV-SARS-2 supernova upended our world in the summer of 2020. Small businesses need handouts, income support, cash flow support and wage subsidies. Almost all of them.
Instead, it’s all ad hoc, with Victoria up there with NSW in leaving sole traders in the lurch and all eyes on the falls of both the Morrison and Berejiklian governments.
The banking industry will see a million Aussie SMEs cark it, easy, the Sydney lockdown may mutate for months.
Here’s ANZ’s managing director Shayne Elliott yesterday: “We know this is a challenging time for many people in these current lockdowns and we understand our customers will likely need some financial assistance.
“We are ready to step up and help our customers again. We have an experienced team and a range of financial support measures for a variety of situations, as we know each customer’s circumstances are different,” Elliott said.
Elliott had nothing new and nor did any bank really, save the $15,000 credit trinket from Westpac.
Interest free temporary overdrafts is the correct label, and conditions apply almost a catch: SMEs need a transaction account with Westpac or a baby brand.
Westpac led off its announcement: “a new measure to support existing small business customers with their cash flow needs, if revenue has been significantly reduced because of the latest lockdown restrictions.
This credit line – offered only by Westpac, for now – is “designed to help bridge the gap to government assistance,” Peter King, the Westpac CEO told the world.
King said: “We know that the current lockdowns mean some of our small business customers may need urgent access to cash. We have introduced a new interest free overdraft to act as a bridge to when government payments flow-in, helping small business owners to cover urgent expenses during this time.
“The government’s comprehensive support package will make a big difference to many businesses and help keep Australians employed. The temporary overdraft will support this process and address cash flow needs in the interim, ensuring our small business customers get access to funds sooner.
“This initiative adds to the existing financial assistance we are offering, including loan deferrals. We want to remind our customers that there is a range of support to help them, and that we have specialist teams at the ready to walk them through the options available,” he said.
The temporary overdraft measure is available to eligible existing small business customers who have Westpac, St George, BankSA, or Bank of Melbourne as their primary bank, and also have a main transaction banking account with this brand.