The non-major lender has announced changes to its credit policy to reflect economic uncertainty from the coronavirus outbreak.
Gateway Bank has announced a number of changes to its lending policy to “ensure new borrowers can afford their loan repayments” and to “continue to lend responsibly”.
Gateway’s policy revisions relate to income and employment conditions on new applications submitted from Thursday, 10 April.
For new PAYG applicants:
- Income evidence, which includes payslips and corresponding bank account credits, must not be older than 14 days at approval.
- “Less stable” forms of income – including casual employment, overtime, bonuses and commission income – will generally be treated at a discount rate of 65 per cent, down from 80 per cent, unless it can be demonstrated that income level has “remained steady”.
For self-employed applicants:
- Business activity statements (BAS) covering the period from the financial statements to the most recent BAS period must be provided.
- In addition, Gateway will require three months’ business bank statements (no older than 14 days) evidencing continuing income in line with the BAS.
Moreover, Gateway has noted that for applications that have already received conditional or formal approved, the bank will require a written confirmation from the applicants confirming that:
- they still want to proceed with the transaction; and
- their income and employment situations have not changed significantly.
Gateway Bank is the latest lender to adjust its risk appetite, joining the likes of MyState Bank, Heritage Bank, ME Bank and several non-banks in revising their credit policies in response to the COVID-19 fallout.
[Related: MyState, Heritage tighten risk appetites]