To help continue to support businesses impacted by the Coronavirus pandemic and those in flood-affected areas following the conclusion of JobKeeper support, the Federal Government has earlier this month announced its SME Recovery Loan Scheme – an extension of the previously released “SME Guarantee Scheme”.
As per the 25th August 2021, a new update released by the Federal Government will now expand the eligibility to access the SME Recovery Loan Scheme, with businesses impacted by the COVID-19 who have a turnover less than $250 million able to access loans of up to $5 million over a term of up to 10 years.
Previously criteria restricted applicants to those who received Jobkeeper during the March quarter of 2021 or have been a flood-affected business - however in recognition of continued economic impacts, this has now been removed.
Additionally, businesses that have accessed loans in Phase One and Phase Two can also apply for the new scheme.
Key Features of the Extended Scheme
- The Federal Government will guarantee 80% of the loan amount;
- The size of eligible loans is now set at $5 million, in addition to the Phase One and Phase Two loan amounts;
- Loans are for terms of up to 10 years, with an optional repayment holiday period of up to 24 months;
- Loans can either be unsecured or secured (excluding residential property);
- The interest rate on loans will be determined by lenders, but will be capped at around 7.5 per cent;
- Loans can be used for a broad range of business purposes, although there are some exclusions; and
- Loans may be used to refinance any pre-existing debt - including those from the SME Guarantee Scheme
It is important to note that loans will be available from 1 April 2021 and must be approved prior to 31 December 2021.
For More Information
For more information, visit the Federal Government's SME Recovery Loan Scheme website via - https://treasury.gov.au/coronavirus/sme-recovery-loan-scheme
For assistance in formulating an application for the Scheme, please contact the Archer Gowland Redshaw adviser team on (07) 3002 2699 | (07) 3221 4004.
