Expansion of the SME Loan Scheme
As part of last Thursday's post Jobkeeper Covid-19 support announcement, the Morrison government revealed an extension to, and expansion of, its SME Loan Guarantee Scheme.
The Coronavirus SME Guarantee scheme, which has had limited take-up to date, is designed to aid small businesses that would be viable except for the pandemic.
What's on offer
Under changes to the scheme, the Government will provide a guarantee of 80% (from 50%) to SME lenders for new unsecured loans to be used for working capital. The Government's will increase the limit you are able to borrow from $1 million to $5 million.
Businesses with a higher turnover are expected to benefit, too, as the cap on eligible turnover increases from $50 million to $250 million.
Borrowers will be offered a repayment holiday on both principal and interest for up to 24 months, with loan terms increased from five years to 10 years.
Who is eligible
The expanded scheme will only be open to recipients of JobKeeper payments between 4 January and 28 March, and those that applied during the first phase of the scheme, with the government expecting more than 350,000 current JobKeeper recipients to be eligible.
When can you apply for a loan?
The loans will be available from 1 April and remain open until 31 December.
"This SME Recovery Scheme is part of the next step in our plan to help small businesses stand on their own two feet as the economy recovers from COVID-19," Treasurer Josh Frydenberg said. "The expansion and extension of the loans will back businesses that back themselves and will help businesses who continue to do it tough build a bridge to the other side of the crisis and keep their staff employed."
If you would like help determining whether you are eligible, or support applying for the loan, speak to you Aspen Corporate Advisor