SME Recovery Loan Scheme revamped to help more businesses
After the federal government expanded the eligibility criteria for the SME Recovery Loan Scheme, more small and medium-sized firms struggling to stay afloat as a result of COVID's economic repercussions will be able to get money at a lower cost.
In order to be eligible for the SME Recovery Loan Scheme, SMEs will no longer have to have received JobKeeper during the March quarter of 2021, or have been a flood-affected business.
What makes the SME Recovery Loan Scheme unique?
In essence, the federal government will guarantee 80% of each loan in the system, allowing lenders to offer the loans “cheaper and more freely” than they could with traditional commercial loans.
The scheme’s initial iteration, known as the SME Guarantee Scheme, began in March 2020 with a slightly different name (and back then the government was only guaranteeing 50 percent of the loan).
SMEs with a turnover of less than $250 million that are affected by COVID will be able to borrow up to $5 million over a 10-year period under the current iteration of the plan.
The SME Recovery Loan Scheme also has the following features:
– Borrowers might get a 24-month payments break from their lenders.
– Loans can be utilized for a wide range of commercial goals, such as assisting in the financing of investments.
– An qualifying borrower’s pre-existing debt, including debts from the SME Guarantee Scheme, can be refinanced with a loan.
– There are two types of loans: unsecured and secured (excluding residential property).
Is this a plan that could benefit your company?
The scheme has already helped a lot of other firms around the country, with 74,000 loans totaling roughly $6.2 billion written thus far.
The revisions were promptly welcomed by both NAB and Westpac, with NAB commenting that “SME Recovery Loans are a viable choice for enterprises who require additional financing at this time.”\
It’s worth noting, though, that the loans will only be available until December 31, 2021, and only through partner lenders.
For more information on the SME Recovery Loan Scheme, get in touch with us immediately and we’ll guide you through the process of applying through one of the participating lenders.
To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at email@example.com
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