Banks lend helping hand to quake hit business

Westpac's Hub is due to open next month.

Many of the country's banks have come to the party to help struggling business owners get through the disastrous effects of the Canterbury earthquakes.

Interest-free loans are being offered to some business owners and one bank is building a dedicated business hub - providing people with free premises to run their business and hold meetings.

The 2500sq m Westpac Business Hub will be open to any Christchurch business and will provide a range of free services such as phone, wireless broadband, video-conferencing, work spaces, conference rooms and a corporate lounge.

Due to open at the beginning of June, the $1 million hub is next to the CBS Arena and will accommodate up to 300 people at a time with an option for the premises to be extended if required.

Ian Blair, Westpac's general manager of business banking, says the hub, which is expected to be open for a minimum of 18 months, is being created to meet the demands of people who need somewhere to carry on their business day-to-day.

Apart from providing all the normal facilities found in a modern office, meeting rooms will help suppliers and buyers get together, as well as giving business owners a chance to meet paid advisers in comfort - even if those advisers are from other banks.

John Brophy, Westpac's business banking regional manager for the South Island, says people will be able to just turn up to attend meetings or sit there all day to run their business - although the hub won't be a replacement for a company's dedicated office.

"We couldn't really accommodate an office of 50 people and all their equipment," says Brophy. "The broad aim of the hub is to facilitate commerce, the centre of the city has been so badly affected that day-to-day business relationships are not happening - those relationships have been fragmented so it is hard for people to do business. The hub is part of the solution to this."

Should the hub reach capacity, Brophy says they already have an arrangement in place to use space at the adjacent CBS Arena - a covered walkway will link the two buildings.

Brophy says the hub may lead to people doing business in a different way, choosing to hot-desk rather than have a dedicated place of work.

Westpac is also considering having support services provided by lawyers, accountants and other advisers on site.

The Canterbury Employers Chamber of Commerce and Recovery Canterbury will both have a presence in the hub.

Elsewhere, the ASB pledged $250 million to help with the rebuilding of businesses and communities in Christchurch. Of the total pledged, $100 million has been set aside to help SMEs that are existing customers of the bank.

The fund will be used to offer interest free loans of up to 12 months, followed by a discounted interest rate 1 per cent below the prevailing rate at the time of repayment.

Applications for the fund officially remain open until August 31. However, Ian Park, chief executive of retail banking says the bank will "always be happy to talk to people at any time". Principal payments on these loans will not be required during the interest-free period.

The ASB also has a $100 million pool of cash to help new businesses get off the ground and fund the expansion and rebuilding of firms that can show they will be financially viable within 12 to 24 months. Loans will be restricted to a maximum of $1 million per customer and will be interest-free for the first 12 months.

Park says the bank has had a strong pick-up of the loan facilities with more than $150m having been loaned under the scheme already.

"Our aim is to stimulate the economy here, retain jobs and keep businesses moving," says Park.

"We wanted to help business owners get back to normal as soon as possible - whatever normal looks like.

"The people of Christchurch face a huge challenge but also a huge opportunity.

"Our concessionary loan packages are not a short-term fix, we are here to help for the long term while taking the pressure off any cashflow issues our customers may face. Some customers say they just need the loan for six months."

On April 20, the ANZ announced a "specialist earthquake response centre" and plans to adapt its presence in Christchurch to provide a "high level of support to both ANZ and National Bank customers".

ANZ New Zealand chief executive David Hisco says just like other businesses in Christchurch, it has to adapt to life post-quake.

He says the response centre will provide customers with specialised support on their banking options, including mortgage restructuring for those affected by the February quake.

Hisco hopes that by late July the company's ANZ branch in Riccarton will be remodelled as a business office to house commercial, agriculture and institutional staff who have been displaced from the CBD.

BNZ has extended around $18 million in hardship assistance to more than 1300 of its businesses and home-owners impacted by the earthquake to help with cashflow demands.

The bank has also allocated an additional $1 billion of new funding for investment and support.

Campbell Parker, the bank's regional managing partner for BNZ southern, says the funding line is to be allocated to infrastructure projects, rebuilding businesses across all sectors and to fund new housing stock.

"We have had relief packages in place from the day after the quake hit," says Parker. "We had these in place after the September quake and reinstated them in February.

"We have also pushed decision-making down to the branches, to empower our staff to make decisions at store manager level for some of our SME clients."

Parker says in the days after the February quake, 20 per cent of the bank's clients who were affected said they would need access to either temporary funding or loan repayment holidays.

"But so far only 563 customers have accessed that temporary funding," says Parker.

"Most of that funding has been used to help businesses relocate and for cash flow funding due to decreased turnover. No matter which bank you are with, I am advising business owners to seek out the support they need so their business survives."