The Government has announced an extension to the Coronavirus SME Guarantee Scheme which supports small and medium sized businesses (SMEs) to get access to the funding to adapt and innovate during the coronavirus crisis.
Under the existing Scheme, the Government is providing support to SMEs in partnership with 44 approved lenders by guaranteeing 50 per cent of new unsecured loans to SMEs. The Scheme has seen more than 15,600 businesses accept loans worth $1.5 billion.
The next phase of the Coronavirus SME Guarantee Scheme shifts its emphasis to helping businesses access more affordable and longer term credit.
Key changes to the Scheme include:
- extending the purpose of loans able to be provided beyond working capital, such that a wider range of investment can be funded;
- permitting secured lending (excluding commercial or residential property);
- increasing the maximum loan size to $1 million (from $250,000) per borrower;
- increasing the maximum loan term to five years (from three years); and
- allowing lenders the discretion to offer a repayment holiday period.
The initial phase of the Scheme remains available for new loans issued by eligible lenders until 30 September 2020.
The second phase of the Scheme will start on 1 October 2020 and will be available until 30 June 2021.
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