Wide Bay businesses have been offered a helping hand as they move into the recovery phase of the coronavirus crisis, with the Morrison Government extending the Coronavirus SME Guarantee Scheme.
Federal Member for Wide Bay Llew O’Brien said the scheme had already helped more than 15,600 businesses accept loans worth $1.5 billion, and its extension would ensure they could continue to adapt to a COVID-safe business environment.
“Many businesses rely on finance so they can grow and expand to create jobs, and when COVID-19 hit there was a risk that access to finance would cease, so the Morrison Government stepped in with Coronavirus SME Guarantee Scheme,” Mr O’Brien said.
“To help businesses move into a COVID-safe economy, we’re now extending the purpose of loans for a wider range of investment, increasing the maximum loan size from $250,000 to $1 million per borrower and increasing the maximum loan term from three years to five years.
“The next phase of the Coronavirus SME Guarantee Scheme will help Wide Bay businesses move out of hibernation, rebuild, adapt and create jobs on the other side of the coronavirus crisis.”
Under the existing Scheme, the Government is providing an unprecedented level of support to SMEs in partnership with 44 approved lenders by guaranteeing 50 per cent of new unsecured loans to SMEs.
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 extended terms of the Scheme will enable lenders to continue supporting Australian small businesses when they need it most. The expanded Scheme will shift from providing access to working capital to helping businesses stay afloat during the crisis to now also enabling them to access more affordable and longer term credit so that they can invest for their future.
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.