From retailers to gyms, hairdressers to cafes, even construction and tradies, many Australian businesses had to cease trading for months while others felt the ripple effect as the economy slowed and the global pandemic raged on.
The Australian Government’s SME Guarantee Schemes have helped many of them survive the closure and endure through an extremely challenging time. As of 1st Jan 2022, the expansion scheme, known as the Government SME Recovery Loan Scheme, has become available for SME’s impacted by the pandemic, and is designed to support businesses helping them to recover and grow.
The Government will be working to enhance lenders abilities so they can provide cheaper credit to eligible SME’s for the finances required to recover from the financial impact of the global pandemic, maintain their business and invest for future growth.
Under the scheme expansion for 2022, loans will be available from 1st January 2022 until 30th June 2022, and will come with a Government guarantee of 50 percent.
Are you eligible?
The scheme is available to SME’s with up to $250 million turnover, including self-employed and not-for-profit organisations and SME’s that were adversely economically affected by COVID-19 from 1 October 2021. Eligible loan purposes include refinancing existing loans and a broad range of business purposes including to support investment. Loans can also be used to purchase non-residential real property (such a commercial property) or for the acquisition of another business.
Loans have no minimum amount but are capped at $5 million and include:
- term loans,
- overdrafts,
- working capital and revolving facilities,
- leases and hire purchase agreements.
The loan cannot be used to:
- purchase residential property,
- financial products,
- lend to an associated entity or
- to lease, rent, hire, or hire purchase existing assets.
Loans are 50 percent Government backed for a loan term of up to 10 years. Loan interest rates will be determined by the lender and capped at around 7.5 percent. Loans backed by the scheme will be available through approved participating lenders and decisions to extend credit and manage the loan, remain with the lender.
To see full information on the scheme, including a list of approved participating lenders, please visit SME Recovery Loan Scheme.