The bank is ready to start issuing government-guaranteed loans for companies affected by COVID-19.
The government announced on March 20 that it had agreed to underwrite 80% of personal bank loans for eligible companies.
This means that if the contract is breached, 80% of the loss will be borne by the government / taxpayer and the bank will bear 20%.
The government is taking most of the credit risk to encourage banks to continue lending.
Although the loan will be written according to the bank ’s loan standard, Finance Minister Grant Robertson stated that the risk-sharing arrangement “has a higher risk tolerance than what you usually see from the bank, because obviously we are not suitable under option weight Are at normal risk. "
The "Commercial Finance Guarantee Program" will cover loans totaling $ 6.25 billion.
To be eligible, the company must be located in New Zealand and have a turnover of between US $ 250,000 and US $ 80 million at the end of fiscal 2019.
Due to the interruption of COVID-19, the loan can only be used to meet emergency liquidity or transition financing needs.
Unless they are lent out on or after March 16, 2020, the loan income will not be used to repay capital assets / projects, distribute dividends, borrow outside the borrower group or refinance existing debt.
Under the plan, the maximum loan amount that banks can provide to each company is $ 500,000.
The maximum term of each loan is three years. Different banks will have different terms and rules.
The plan only covers new loans.
Does not include real estate development, real estate investment and agriculture.
If the borrower uses the bank ’s existing facilities (except for credit cards, trade finance and other types of financing designated by the bank), they can only obtain loans according to the plan.
Participating banks include ANZ, ASB, BNZ, Heartland Bank, HSBC, Kiwibank, SBS Bank, TSB and Westpac.
Future "difficult dialogue"
Roger Beaumont, CEO of the New Zealand Bankers Association, said the bank ’s credit assessment usually takes 10 business days.
ANZ ’s Mark Hiddleston said: “In order to conduct a faster evaluation, when we ask for a dialogue with our customers, they will develop a plan or plan to continue the crisis and then let the company stand Get up and think twice. "
Simon Power of Westpac said: "Like any business loan, we still need to understand whether every customer can fulfill their promises. We don't want to make people affordable by providing loans to customers who have no feasible method. Up. Huge financial pressure. "
ASB's Vittoria Shortt made a similar point, adding: "There will be some difficult conversations in the future, but this is our responsibility as a responsible lender."
Steve Jurkovich of Kiwi Bank said: "The message I give to the company is to contact us as soon as possible. Even if you think you have enough cash flow to deal with the initial impact of Covid-19, the financial impact may last longer, and we will do our best Help you solve this problem. "
News reference: https://www.interest.co.nz/news/104380/more-detail-unveiled-which-businesses-are-be-eligible-80-taxpayer-backed-bank-loan-get