Business owners to be prepared for a tough talk with banks ahead

Covid-19 is significantly impacting lots of businesses. Many business owners have explored their lending options with their banks, such as SME loan guarantee, business loan deferral arrangement and loan restructuring etc. Even businesses were able to find some temporary lending solutions, but some of them may not make it to the other side.

Many banks have tightened their lending policy on SME business lending due to the uncertainties in the economy. Banks would provide more support to businesses that have long-term viability and positive future.   

Business loan annual review with banks could be tough if businesses had a bad year. If your business loan is due to annual review soon, then it would be wise to get prepared. Generally, banks may need to review the following main information:

·        Business profit and loss statement and balance sheet

·        Latest business activity statement

·        12 months ATO tax portal statement

·        Cash flow forecast

Beside the requirements above, banks may ask additional information about Covid-19 impact on businesses. 

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