Echuca-based finance broker Sarah Patterson said in the past two weeks she had seen banks tighten their vetting measures.
“The banks have only starting asking for more information on loan applications in the last two weeks,” Ms Patterson said.
"Their main concern is making sure people have an income and it’s ongoing, so someone taking out a loan this month can repay it 12 months down the track.
“They want to know your income before COVID, your income during COVID and your income after COVID.”
Ms Patterson works at Patterson Finance, which helps local clients secure home, car, farm and other loans.
The main way people are being asked to prove a secure income is through letters from their employers swearing to not decrease hours or terminate their employee.
Ms Patterson works with 34 banks and lenders, and said not all of them were toughening up their loaning requirements, but it was a growing trend.
“We’ve had clients coming to us on 100% JobKeeper income and saying on June 1 they’ll be back at work full-time, but full-time for them is 40% JobKeeper and 60% reduced hours,” she said.
“The banks may request extra documentation to confirm income in such a case.”
Ms Patterson said the finance industry was aware how uncertain the next six to 12 months would be, and “no-one really knows” what is in store.
Industries marked ‘high risk’ by the banks include: hospitality, tourism, childcare and beauticians.
Industries considered safe by the banks include: farming, construction and education.
Ms Patterson expected the banks’ new measures to evolve quickly as the economy bounces back, saying in two months’ time loan requirements will likely be “more black and white”.
And example is the government's recently announced stimulus package for home renovators.
"We've been flat out since the government announced the HomeBuilder scheme, which gives $25 000 to home builders and renovators,” Ms Patterson said.
"We are still writing a lot of loans at the moment, and the banks are still lending money, they are just being more responsible about it."
The HomeBuilder scheme is predicted to stimulate $10 billion in residential building activity, and will be available until December.
6°C