A Small Business Owner’s Guide to Loans: Should You Get One During COVID-19?

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A Small Business Owner’s Guide to Loans: Should You Get One During COVID-19?


The COVID-19 pandemic has bettered economies around the world, forcing millions of people into unemployment. Australia has not been spared, and across the country, business doors continue to be shut, sometimes for good. Thankfully, there is some relief in sight. The Australian government has passed legislation for the $130 billion JobKeeper Payment, which allows more Australians to keep their jobs and businesses amid the threat of coronavirus. Employers will be able to claim a payment of $1,500 per eligible employee. 

There’s also relief on the horizon for small businesses. A mandatory code of conduct commercial tenancies has been announced to support small and medium-sized enterprises (SMEs). There are also the aforementioned packages for small business loans. These aren’t just any loans—they’re loans specifically designed for helping.

If you’re a small business owner considering a loan, this quick guide is for you.

Should you borrow money now?

Before anything else, it’s integral to assess if whether or not you need quick cash. Here are some questions to ask yourself:

  • Will the loan help you stay in business?
  • How much risk are you actually in?
  • Will the funds be able to leverage an opportunity for your business right now?
  • Will the funds be used for the short-term or long-term?

Remember: Do not apply for a loan if you have no way of paying it back. Furthermore, if you’re unsure if your business will survive the pandemic, it’s best to just not risk it. You will not want to end up with the burden of loans after the crisis, only for your business to close down.

Who’s helping?

Banks across the country are offering similar relief packages for business owners, but the details of help differ between institutions. Here are some of them:

1 – ANZ 

The ANZ offers businesses with existing loans of up to $10m repayments on hold for six months. Any interest run-up during the period is capitalized. The bank also offers an overdraft increase, and eligible business customers will also be able to borrow up to $250,000, under the government’s loan guarantee scheme. 

2 – Commonwealth Bank

Repayments on loans between April and June will be automatically be deferred for small businesses that borrowed up to $5m. Should be deemed necessary and the businesses eligible, owners can also apply for a further deferral. As with ANZ, any interest run-up during the period will be capitalized. Some types of loans, however, will be due at the end of the loan period.

Commonwealth Bank further notes that their COVID-19 package also includes the waiving of merchant terminal fees, establishment fees, and redraw reefs on business term deposit accounts.

3 – NAB

The NAP also offers loans that will be paused for up to six months. Business credit card repayments will also be deferred, and any Eftpos terminal rental will be waived for six months. Loans are also available through the Morrison government’s loan guarantee scheme.


These are trying times for small businesses, but take comfort in the fact that relief exists. If you owe institutions or service providers any money, negotiate on flexible payment terms. Talk to your staff and explain the situation, but don’t let them go without any form of assistance. At a time of collective struggle, a helping hand makes all the difference—you’ll soon find yourself on the receiving of help, too.

If you require a business loan in Sydney, our team at Business Loan Experts can help you. Reach out to us today!

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