Extension and Expansion of SME Loan Scheme Announced
To further assist small and medium sized businesses in adapting during the COVID-19 crisis, the Coronavirus SME Guarantee Scheme has been extended to June 30 next year.
The scheme has had limited popularity to date with only 15,600 businesses obtaining loans worth a combined $1.5 billion. The scheme had a planned value of $40 billion.
To attract more SMEs to the scheme, the treasurer has announced a post-September tailoring of the scheme.
The loans will be modified to extend past working capital, allowing for a much wider range of investment purchases.
The initial phase of the scheme will remain available for new loans issued by eligible lenders until 30 September 2020. This second phase will kick off on 1 October 2020 and run till 30 June 2021.
Overview of changes
- Loans can be provided for purposes other than working capital
- Secured loans will be permitted in addition to unsecured loans
- The maximum loan size will increase to $1 million (from $250,000)
- The maximum loan term will increase to five years (from 3 years)
- Lenders have additional discretion on offering repayment holidays
The expanded scheme has been specifically designed to help businesses that are staying afloat prepare with longer term solutions in the post-COVID environment.
Modoras is here to support you during these difficult times. From building a resilient business to any business questions you may have, contact us on 1300 888 803 book a catch up with a Modoras professional.
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