The Government has recently extended the SME Recovery Loan Scheme by a further six months (to 30 June 2022) to support SMEs adversely economically affected by the Coronavirus Pandemic.
Under the Scheme, eligible businesses can obtain loans through participating bank and non-bank lenders with the backing of a government loan guarantee.
Around 80,000 loans worth approximately $7.3 billion have been written to date since the Scheme commenced in March 2020.
SMEs who are dealing with the economic impacts of COVID-19 with a turnover of less than $250 million will be able to access loans of up to $5 million over a term of up to 10 years.
Other key features of the Scheme include the following:
- Lenders can offer borrowers a repayment holiday of up to 24 months.
- Loans can be used for a broad range of business purposes, including to support investment.
- Loans may be used to refinance any pre-existing debt of an eligible borrower.
- Loans can be either unsecured or secured (excluding residential property).
Importantly, the Government’s loan guarantee has been reduced to 50% (down from 80%) for loans available from 1 January 2022 until 30 June 2022.
