Longer-term ANZ loans help boost business

Big Four bank increases business loan term to assist SME sector

Longer-term ANZ loans help boost business


By Antony Field

ANZ knows that small to medium-sized businesses are an essential part of the Australian economy. The major bank has supported SMEs throughout COVID and has now doubled the loan term for its ANZ Business Loan from 15 to 30 years for amounts less than $3m.

The coronavirus pandemic has been extremely tough on Australia’s small businesses, but with the support of their customers, federal and state governments and lenders such as ANZ, many have survived and are now growing.

ANZ’s general manager commercial broker, Ivan Mioc, and broker Joe Birmingham, a commercial and asset finance specialist at Azura Financial, talked to Australian Broker about the benefits of ANZ business loans.

Mioc praised the role brokers had played in helping their small business clients through the pandemic.

“Brokers have provided outstanding levels of support to their customers through what were probably the most challenging and unsettling times a business could face into,” says Mioc. “What makes this exceptional is this was done at a time when this challenge also applied to their own business.”

When asked how brokers and their clients have been responding to ANZ business loans over the last 12 months, Mioc says: “At a time when it was not unreasonable to think that demand [for finance] would decrease, we have actually seen the opposite, especially in the up-to-$1m lending segment but also across all segments.”

ANZ offered those SMEs that were struggling during COVID-19 a range of financial relief measures, as well as ongoing hardship support.

“Small business customers had the option to apply for a range of measures, including up to 60 days’ repayment deferral on business loans, waiving merchant terminal rental fees for up to three months, and access to funds held in business notice term deposits and farm management deposit accounts without notice periods or break fees applying,” Mioc says.

ANZ has also fully supported federal government stimulus and support packages, including the current Government SME Recovery Loan Scheme. This was expanded in October to support the recovery of SMEs that continue to deal with the economic impacts of COVID-19.

Mioc says ANZ understands the importance customers place on the service their brokers provide to them, and the bank has been very pleased to receive great support from brokers.

“Our analysis found that, in the 12 months leading to September 2021, ANZ wrote 28% more business loans for broker-introduced customers than in the same period the previous year and 21% more compared to the same period two years ago.”

ANZ business loan features

“At ANZ, we believe small businesses are integral to helping communities thrive,” Mioc says. “They are a massive driver for employment growth and give people freedom and agency to pursue their passion.”

ANZ has recently extended the maximum loan term for eligible customers on the ANZ Business Loan when the total lending of the borrowing group is less than $3m from 15 years to up to 30 years when secured by suitable commercial property.

“Extended loan terms and interest-only terms give eligible customers more choices and greater flexibility, which may assist them to run and grow their businesses,” Mioc says.

 “The longer term will usually result in a lower amount of principal being repaid in each regular repayment and the total amount of interest payable being higher than a shorter-term loan as a result of the longer loan term during which interest is paid.”

Eligible customers may also take advantage of an interest-only period of up to 10 years when the total lending of the borrowing group is less than $3m and the loan term is between 20 and 30 years, subject to ANZ’s credit assessment criteria.

ANZ also offers an ANZ Business Offset Account which can help customers save on interest. (Eligibility criteria, terms, conditions, fees and charges apply.)

Mioc says extending the maximum loan term on an ANZ business loan is one way that ANZ is helping eligible businesses access financing solutions that may help them rebound after the pandemic.

“It may help them keep their business moving or take advantage of growth opportunities which may have previously been out of reach.”

Businesses thinking of buying commercial property or refinancing their commercial property loan could be attracted to this extended loan term.

“It can be used for a range of business purposes, provided these are acceptable to ANZ and the product is suitable in the circumstances. The loan must have an appropriate purpose to justify a longer loan term.”

Broker access, diversification

When it comes to brokers wanting to secure ANZ business loans for their clients, Mioc says ANZ understands that brokers have choice when it comes to recommending a bank for a business customer.

“We pride ourselves on being easy to do business with, as brokers have direct access to frontline lenders they can work with, and we encourage brokers to actively engage with their ANZ bankers and broker account managers.”

Aggregators are encouraging brokers to diversify their income base, and ANZ has always supported broker diversification, Mioc says.

“As brokers become more confident and competent in commercial, they further diversify into other commercial lending opportunities.

“We know that this can be a challenging transition, which is why the role of our ANZ broker managers and bankers is so crucial in helping our brokers and customers.”

A proportion of ANZ homeowners are non-PAYG.

“We want to support accredited brokers who want to provide holistic financial solutions to their customers regardless of whether it’s business or personal – it’s important we help support brokers and their customers,” says Mioc.

Mortgage brokers who want to diversify into commercial property will need to gain a separate ANZ accreditation for commercial lending and asset finance and will need to be authorised to act for an ANZ-approved aggregator group.

Broker perspective

Joe Birmingham is a commercial and asset finance specialist at Azura Financial, an independent brokerage based in Double Bay, Sydney.

He worked for 10 years in various corporate and commercial banking roles, including at ANZ, before becoming a broker 18 months ago and working with business owners across a wide range of industries, as well as with commercial property investors.

“ANZ usually get a shot at all of the trading business transactions that I look at,” says Birmingham.

“I find they are especially strong on owner-occupied commercial property purchases and refinances, where they are often able to provide higher LVRs, great terms and very competitive pricing.

“I’m lucky enough to have known the people I work with at ANZ Commercial for years – so I know that the service is always reliable and my clients will be well looked after.”

Birmingham says the extension of ANZ business loan terms from 15 to 30 years affects serviceability and can significantly reduce the monthly repayments.

“This will allow more clients to justify parting ways with their landlord and entering the commercial property market. Another significant difference this product makes is to a client’s cash flow,” he says.

“The 30-year loan term has been really well received by mum-and-dad business owners. Buying a commercial property can obviously be a daunting experience. This product brings the loan term – and often LVR – more in line with what clients are used to seeing on their home loans, and I really think this eases that burden psychologically.”

Birmingham is happy with ANZ’s turnaround times on loans too.

“The timeline on my most recent deal with ANZ was … I sent through a discussion paper summarising the deal on Monday and received indicative pricing and loan terms the same day. I then presented a number of options to the client, and they advised me to proceed with ANZ. Application forms and further financial information were provided by Thursday, and I had a credit-endorsed approval in hand by Tuesday morning.”

Birmingham is really positive about business loan growth moving forward and is hoping to see an “easing of the two-speed economy that has accompanied COVID”.

“Businesses that thrived during lockdown will continue to grow and will require credit to do that. Those that did it tough will love being back open and will continue to turn to brokers to guide them towards the support on offer through the banks and federal government whilst they do.” 

The opinions or views contained in this article are not necessarily the opinions or views of the Australia and New Zealand Banking Group Limited ABN 11 005 357 522 and its related bodies corporate (together, the “ANZ Group”). The views express by Joe Birmingham are his own. The ANZ Group makes no representation and gives no warranty as to the accuracy, currency or completeness of these opinions or views. This content is provided for brokers only and is not for distribution to others, including customers or applicants for finance. Any advice does not take into account your personal needs, financial circumstances or objectives, and you should consider whether it is appropriate for you.

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