The Government’s SME Recovery Loan Scheme is designed to support the economic recovery, and to provide continued assistance to firms that recieved JobKeeper and also to firms that are eligible flood-affected businesses.
On 25 August 2021, the Government announced that in recognition of the continued economic impacts of the coronavirus, the current requirements for SME’s to have received JobKeeper during the March quarter of 2021 or to have been a flood affected business in order to be eligible under the SME Recovery Loan Scheme will be removed.
Participating lenders are offering guaranteed loans on the following terms under the SME Recovery Loan Scheme:
- The Government guarantee will be 80% of the loan amount.
- Lenders are allowed to 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, including those from the SME Guarantee Scheme.
- Borrowers can access up to $5 million in total, in addition to the Phase 1 and Phase 2 loan limits.
- Loans are for terms of up to 10 years, with an optional repayment holiday period.
- Loans can be either unsecured or secured (excluding residential property).
- The interest rate on loans will be determined by lenders, but will be capped at around 7.5%, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time.
Loans under the SME Recovery Loan Scheme can be used to support a wide range of business purposes, excluding the purchase of residential property, the purchase of financial products, the provision of finance to an associated entity, or lease, rent, hire or hire purchase existing assets that are more than half way into their effective life.
Loans are available until 31 December 2021.