The Treasurer Josh Frydenberg has announced the government will extend the range of its unsecured loan scheme to allow businesses to cope with the growing COVID-19 crisis.

The existing scheme has already propped up over 15,000 small businesses, guaranteeing 50 per cent of new unsecured loans.

A second phase of the scheme will be rolled out in October with the hopes that it can assist businesses to adapt and innovate during the crisis. From October the loans can be used to purchase new equipment or invest in adapting a business to suit the new economic environment. To date the loans could only be used for day to day expenses such as wages.

From October businesses will be able to apply for up to $1million in unsecured loans. The maximum for the existing scheme is $250,000.

The Treasurer described the announcement as great for the three and a half million small businesses.

“We’re giving them access to more money, at lower rates and for longer periods.By extending the loan tenure from three to five years. By extending and expanding it from loans up to $250,000 to one million. And we’ll be partnering with the banks. It’s a 50/50 guarantee scheme with the Commonwealth government and with the banks.”

The government is expected to make a detailed statement on the economy on Thursday. This will include news on the deficit and forecasts on growth levels as well as updates on JobKeeper and JobSeeker.

“There is a quarter of the national economy in lockdown. This has had the effect of diminishing confidence beyond the Victorian borders,” Frydenberg told the Today Show this morning. “The job market is still very tough and so the support will continue to be rolled out.”

This post was written for Kochie’s Business Builders and republished here with permission.