Announced yesterday, the Australian Federal Government will continue to help small and medium businesses as they move into the recovery phase of the COVID-19 crisis by extending the Coronavirus SME Guarantee Scheme.
The scheme, originally designed to support small to medium sized enterprises (SMEs) with access to funding so they can adapt and innovate during the COVID-19 crisis, will be amended to extend the purpose of loans to be provided beyond working capital, allowing a wider range of investments to be funded.
Under the existing Coronavirus SME Guarantee Scheme, the Government is providing support to SMEs in partnership with 44 approved lenders by guaranteeing 50 per cent of new unsecured loans to SMEs. The scheme has already seen more than 15,600 businesses accept loans worth $1.5 billion. Amendments to the scheme will help businesses manage COVID-19 enforced change and invest for the future.
The key changes
Key changes to the scheme include:
- Permitting secured lending (excluding commercial or residential property)
- Increasing the maximum loan size to $1 million (from $250,000) per borrower
- Increasing the maximum loan term to five years (from three years), and
- Allowing lenders, the discretion to offer a repayment holiday period.
In partnership with lenders, the new scheme will enable SMEs to move from accessing working capital and simply staying afloat to now affording them access to more affordable and longer-term credit so that they can invest for their future.
The first phase of the scheme remains available for new loans issued by the 44 eligible lenders until 30 September 2020. The second phase of the scheme will start on 1 October 2020 and will be available until 30 June 2021.
We, at Bentleys, are doing everything we can to help businesses come out of this challenging time in good shape.
We will continue to update our COVID-19 resource hub with important developments, so please return soon.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.