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12 November 2020

What is the SME Guarantee Scheme?

Under the Coronavirus SME Guarantee Scheme, the Government is providing a guarantee of 50% to banks for unsecured loans to be used for working capital.

SMEs and sole traders with a turnover of up to $50 million are eligible to receive these loans.

The Coronavirus SME Guarantee Scheme is available for loans made by participating lenders until 30 June 2021.

Participating lenders are offering guaranteed loans on the following terms:

  • loans can be used for a broader range of business purposes, including to support investment in a period of economic recovery
  • borrowers can access up to $1 million in total
  • loans are for terms up to five years, and a repayment holiday is not required but can be offered at the discretion of the lender 
  • loans can be either unsecured or secured (excluding commercial or residential property)
  • the interest rate on loans will be determined by lenders, but will be capped at around 10%, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time.


Borrowers can access credit under the Scheme through any of the participating lenders.