Following its initial inception earlier this year, the Federal Government has provided a further extension to eligibility requirements surrounding it’s ‘SME Recovery Loan Scheme’, supporting more small to medium businesses to mitigate the economic impacts of the COVID-19 pandemic.
Under the extended eligibility criteria, from 1 October 2021, the Scheme now provides more SME business with greater access to additional funding, removing the requirement to have received JobKeeper during the March 2021 quarter or been a business impacted by floods.
Key features of the revised Scheme highlight SME businesses (included self-employed) with a turnover less than $250 million will be able to access loans of up to $5 million over a term of up to 10 years. Loans can be unsecured of secured, with a Government Guarantee being 80% of the loan amount. An optional repayment holiday period of up to 24 months may be offered.
New loans will be available under the program until 31 December 2021.
Other Key Details
Loans issued under the Scheme can be used to:
- refinance pre-existing loans including those from the SME Guarantee Scheme;
- support investment;
- purchase non-residential real property (such as a commercial property);
- acquire another business
Some restriction apply such as:
- not allowing loans more than 30 days in arrears to be financed;
- not allowing loans to borrowers who have entered external administration or are insolvent;
- lenders can vary or restructure loans when they continue to meet eligibility criteria (including the maximum loan term)
- lenders do not increase the loan limit after approval
Loans issued under the Scheme cannot be used to:
- purchase residential property
- purchase financial products
- lend to an associated entity
- lease, rent, hire, or hire purchase existing assets that are more than half-way into the effective life
For More Information
For assistance in formulating an application for the Scheme, please contact the Archer Gowland Redshaw adviser team on (07) 3002 2699 | email@example.com.