The Morrison Government is extending the SME Recovery Loan Scheme by a further six months to June 2022.
Around 80,000 loans worth approximately A$7.3 billion have been written to date since the scheme commenced in March 2020.
This is a bit of a scandal on the industry side for a scheme originally billed as $30 billion worth of support. Commonwealth Bank is responsible for probably in the order of one third of this lending, and Judo Bank is an exception as one of the very, very few lenders to actively advertise for applications under the scheme.
As with the existing scheme, SMEs 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.
The Government will reduce its loan guarantee from 80 per cent to 50 per cent.
Key features of the SME Recovery Loan Scheme continue to 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).