2020 has been quite an unusual year. Due to the impact of covid-19 during the first half of the year, Australian businesses especially the hospitality, tourism and construction industries have greatly/somewhat suffered the consequences. Coincidentally, these are the sectors which most Chinese professionals pursue as their careers.
Australia’s banking industry is led by the big four banks consisting of Commonwealth Bank, Westpac, ANZ and nab. As a response to support companies which are struggling in the midst of the pandemic, they have offered six-month suspensions on their loans. They also established relatively low fixed interest rates for commercial loans. Hence, many small businesses were saved from liquidation or bankruptcy.
According to the CEO of the Australian Banking Association – Anna Bligh, implementing this change could potentially initiate an inflow of more than 8 billion dollars into the small businesses sector. As a result, it would help resolve short term cash flow issues. Bligh also stated that “Small businesses can rest assured that if they need help, they will get it,”
Banks and financial institutions are to speed up their process of reviewing and accepting applications on claims for the six-month suspension period on loans, whilst simultaneously adjusting both the fixed and floating interest rates. This decision has resulted in a notable increase in stock value for large firms, in particular concerning the recent fixed interest rate, which has fallen to its lowest since the last two to three years. The rise in share prices could indicate market confidence towards the emergency protocols put in place by commercial banks due to Covid-19. Such prominent support towards maintaining the economy ultimately reflects the integrity and strength of the crisis management policies imposed by Australian financial institutions. Through an extensive investigation spanning three years conducted by the Royal Commission, it is evident that a well developed and rigorous financial system played a crucial role in administering an efficient response to this pandemic.
KBRZ would like to remind consumers to regularly monitor the current interest rates on their loans, because interest expense is likely a significant part of daily expenditure. Adequate reformation of loan structure under complex interest rate conditions could assist with savings. It is recommended for an individual to maintain active communications with their brokers and lenders to determine the most suitable lending solution.
As one of Australia’s fastest growing real estate and finance solutions companies, KBRZ has professional background in property sales, loans as well as investment funds. KBRZ has years of experience in mortgage services, allowing the company to establish mature financing channels and customer networks, as well as accreditations with multiple reliable Australian financial institutions.
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