Expanded SME loan scheme
The government has announced an extension and expansion of its SME Recovery Loan Scheme.
Enhancing lenders’ ability to provide cheaper credit, the scheme is allowing many otherwise vulnerable SMEs to access vital additional funding to get through the impact of Coronavirus, recover and invest for the future.
The expansion of the scheme will see the limit of eligible loans rise from $1 million to $5 million, as well as a cost split shift with the government guaranteeing a higher portion of the loan. The shift would see the government’s 50-50 split with banks shift to an 80-20 split.
Businesses with a higher turnover are expected to also benefit, 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.
The expanded scheme builds on the framework established in the two phases of the Coronavirus SME Guarantee Scheme, and specifically targets SMEs currently receiving JobKeeper. The scheme is only open to recipients of the JobKeeper payment between 4 January 2021 and 28 March 2021.
Loans will be made available from 1 April 2021 until 31 December 2021.
Both self‑employed individuals and non-profit businesses are eligible. Businesses that have accessed loans in Phase 1 and Phase 2 can also apply for loans under the scheme.
Got questions about further eligibility requirements or how to apply for a loan? Get in touch with our Tax & Accounting team who will be able to assist you on 02 9981 2300.