Low interest loan scheme available for SMEs

The Small and Medium Enterprise (SME) Recovery Loan Scheme is designed to support businesses who received the final round of JobKeeper payments. It has also been expanded to assist businesses that were affected by the March 2021 floods and are located in specific disaster zones within New South Wales and Queensland.

Under the Scheme, businesses will have access to low-cost bank loans up to $5 million where the Government guarantee will be 80% of the loan amount. Lenders are able to offer businesses a deferral on repayments for up to 24 months and loan terms can be up to 10 years.

The interest rate on loans will be determined by lenders, however, they will be capped at around 7.5%, with some flexibility for the interest rate on variable rate loans to increase if market interest rates rise over time.

The Scheme is enhancing lenders’ ability to provide cheaper credit, allowing many businesses access to vital funding to help them get through the impacts of COVID-19 and invest for the future.

Eligibility criteria

To be eligible, you must:

  • Have a turnover of less than $250 million and be a recipient of the JobKeeper payment between 4 January 2021 and 28 March 2021, or
  • Have been affected by the March 2021 floods and be locate in eligible Local Government Areas

For a full list of the eligible Local Governments Areas, click here.

Eligible loan uses

Loans issued under the Scheme can be used for a number of business purposes to support investment, including:

  • refinancing existing loans and pre-existing debt
  • purchasing commercial property
  • acquisition of another business.

Uses not permitted with the loan:

  • purchasing residential property
  • purchasing financial property
  • lending to an associated entry
  • leasing, renting, hiring or hire purchases of existing assets that are more than half way through their effective life.

How to apply

 

All loans backed by the Scheme will be available through participating commercial lenders. We work closely with a number of lenders on our panel to help clients secure funding for their business. If you’d like to discuss or need assistance in obtaining finance, we can help.

 

For full details on the SME Recovery Loan Scheme click here: https://treasury.gov.au/coronavirus/sme-recovery-loan-scheme

 

If you have any questions regarding the SME Recovery Loan scheme, please give us a call on 03 5434 7690.