The Government will expand and extend its ‘SME Loan Guarantee Scheme’ as part of its commitment to support small and medium enterprises.
The expanded Scheme will also increase the size of eligible loans, increasing from $1 million under the current Scheme to $5 million.
Treasurer Josh Frydenberg said this latest package of measures was all part of the Federal Government’s National Economic Recovery Plan.
“This SME Recovery Scheme is part of the next step in our plan to help small businesses stand on their own two feet as the economy recovers from COVID-19,” the Treasurer said.
“The expansion and extension of the loans will back businesses that back themselves and will help businesses who continue to do it tough build a bridge to the other side of the crisis and keep their staff employed.”
The Scheme is being targeted and tailored to support businesses that have been relying on JobKeeper during the March quarter.
Importantly, the Scheme will also be able to be used by eligible businesses to refinance their existing loans. This will allow SMEs to access the more concessional interest rates available under the program and to better manage their cash-flows through an extended loan term and lower combined repayments.
Businesses with a higher turnover will also benefit under the expanded Scheme, with the maximum eligible turnover increased from $50 million to $250 million.
Maximum loan terms under the expanded Scheme will also be increased from 5 to 10 years – providing businesses and lenders with greater flexibility.
The expanded Scheme will also allow lenders to offer borrowers a repayment holiday of up to 24 months.
More than 350,000 current JobKeeper recipients are expected to be eligible under the expanded Scheme. Loans will be available from 1 April 2021 and must be approved prior to 31 December 2021.
For further information on the Small and Medium Enterprise Recovery Loan Scheme visit SME Recovery Loan Scheme
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