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”.
Building further on the initial two-phase program, the Scheme is only open to SME businesses with a turnover up to $250 million and were recipients of the JobKeeper payment between 4 January 2021 and 28 March 2021, as well as businesses that are located or operating in eligible flood-affected local government areas in March 2021.
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 to $5million, in addition to the Phase 1 and Phase 2 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;
- 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 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 (070 3002 2699 | (07) 3221 4004.