The Coronavirus Small and Medium Enterprise (SME) Loan Guarantee Scheme is now extended to 30 June 2021, with the aim to provide further support to small and medium-sized businesses that have been affected by the economic impacts of COVID-19.
The extension of the scheme will come into place from 1 October 2020 and will be available for loans made until 30 June 2021.
The extension of the scheme will ultimately allow businesses to access the working capital and investment funds they need for a broader range of business purposes, with loans of up to $1 million available for a maximum period of five years, up from the previous three year period.
The extension of the scheme will see the Australian Government along with 44 approved lenders, guarantee 50% of new, secured or unsecured loans to small to medium-sized businesses. The lender will now also have discretion to offer repayment holiday periods and are being encouraged by the Government to provide flexible facilities that only have to be drawn if needed by the SME, ie, interest will only be charged if they draw down funds.
To access the loan, a small to medium-sized business (including sole traders and not-for-profits) must not exceed a turnover of more than $50 million.
Applications will continue to be subject to lenders’ credit assessment processes, and the decision on whether to make the loan available will remain with the lender.
The current phase of the SME Loan Guarantee Scheme will remain available for new loans issued by eligible lenders until 30 September 2020.
For full details of the extension of the SME Loan Guarantee Scheme from 1 October, please refer to the Treasury site by clicking here.
Our team at Allan Hall Business Advisors can assist you to navigate your SME loan options smoothly and efficiently. Please do not hesitate to contact us should you require assistance or have any further questions.