The treasurer Josh Frydenberg has announced an extension of the SME Recovery Loan Scheme which was due to wrap up at the end of 2021.
Around 80,000 loans worth approximately $7.3 billion have been written to date since the scheme commenced in March 2020. Eligible small and medium businesses will now have until June 30 2022 to apply for a loan via the scheme.
Scheme continues government support for small businesses during COVID-19 recovery
The Treasurer said the extension of the SME Recovery Loan Scheme continues the government’s ongoing support for small businesses as they continue to bounce back from the pandemic.
As with the existing scheme, SMEs who are dealing with the economic impacts of COVID-19 with a turnover of less than $250 million will be able to access loans of up to $5 million over a term of up to 10 years.
“With our economy showing signs of a strong rebound as restrictions ease, the Government will reduce its loan guarantee from 80 per cent to 50 per cent, helping drive a private sector-led recovery.”
Community advocates welcome scheme extension
Chris de Bruin, Chief Executive, Consumer and Business Banking said the scheme has been a real lifesaver for small businesses with the lender seeing increased interest in the scheme I recent weeks.
“Westpac has played a leading role in lending to customers under the scheme, with more than $600 million in applications submitted since October.”
“In recent weeks, we’ve seen a 160 per cent week-on-week increase in applications, with the average deal size doubling since September,” de Bruin said.
The Australian Small Business and Family Enterprise Ombudsman Bruce Billson has welcomed the Australian government’s extension of the SME Recovery Loan Scheme, saying it will provide critical access to finance to support small business owners to once again find their feet.
“Small businesses are working hard to get their businesses back up and running after a very challenging couple of years,” Billson said.
“The good news is that COVID-19 conditions are finally settling and that is allowing small business owners to get on with what they do best – growing their business. The extension of the SME Recovery Loan Scheme will offer much-needed cash flow to small businesses, giving them a fighting chance at returning to full strength.”
Other key features of the SME Recovery Loan Scheme include:
- Lenders can offer borrowers a repayment holiday of up to 24 months.
- Loans can be used for a broad range of business purposes, including to support investment.
- Loans may be used to refinance any pre-existing debt of an eligible borrower.
- Loans can be either unsecured or secured (excluding residential property)
This post first appeared on Kochie’s Business Builders you can read the original here
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