Published on 17/09/2021 by Any Business.Com.Au

Is Your Business Eligible for the Government's SME Recovery Loan Scheme?

Business communities in Australia have been badly affected by extended shutdowns and restrictions imposed on activities because of the Coronavirus pandemic.

If you're a small business owner in Australia, perhaps NSW or Victoria in particular, you've no doubt investigated all avenues of government financial assistance available to you throughout the COVID-19 restriction periods.

There are a number of state and federal government relief packages currently available to eligible small businesses, one of those being the SME (small to medium enterprise) Recovery Loan Scheme - so let's take a closer look at how it works and who might be eligible.

SME Recovery Loan Scheme

The Government's SME Recovery Loan Scheme (the Scheme) is designed to support the economic recovery and provide continued assistance to small businesses dealing with the economic impacts of the coronavirus crisis.

The Scheme is enhancing lenders' abilities to provide cheaper credit to otherwise viable SMEs for additional funding to get through the Coronavirus crisis, recover and invest for the future.

The Government will work with lenders to ensure eligible firms have access to finance to maintain and grow their businesses.

Current Eligibility

On 25 August 2021, the Government announced changes to eligibility requirements for the SME Recovery Loan Scheme.

The Scheme is only open to firms with turnover of up to $250 million that either received JobKeeper payments in the March quarter of 2021 or have been affected by the floods eligible LGAs in March 2021.

Both self‑employed individuals and non-profit businesses are eligible. Businesses that have accessed loans in Phase 1 and Phase 2 can also apply for loans under the scheme.

The Process

  1. Approach a lender
  2. Loans backed by the Scheme will be available through participating commercial lenders. The Government is not directly participating in the lending process.
  3. Lender makes a decision.
  4. The decision on whether to extend credit, and management of the loan, will remain with the lender.
  5. If a lender declines your application or you are not satisfied with the product offer, you can approach other lenders.
  6. Businesses are encouraged to shop around and compare products offered by different participating lenders.

Lenders can offer any product suitable to the borrower, with the exception of credit cards, charge cards, debit cards or business cards.

Loans issued under the Scheme may take any other form of credit, provided the Scheme's eligibility criteria are met.

What Can You Use the Loan for?

Loans issued under the Scheme can be used to refinance existing loans or for a broad range of businesses purposes (including to support investment) but cannot be used to:

  • purchase of residential property;
  • purchase of financial products;
  • lending to an associated entity; or
  • lease, rent, hire, hire-purchase existing assets that are more than half way into their effective life.

Participating Lenders

The Government is currently considering applications from lenders interested in participating in the SME Recovery Loan Scheme.

The following lenders have been approved to participate in the SME Recovery Loan Scheme:

  • ANZ
  • Bank of Queensland
  • Commonwealth Bank of Australia
  • Fifo Capital Australia
  • Get Capital
  • Judo Bank
  • Liberty Finance
  • Moneytech Finance
  • National Australia Bank
  • Queensland Country Bank
  • Regional Australia Bank
  • Social Enterprise Finance Australia
  • South West Credit Union Co-operative
  • Suncorp-Metway
  • The Mutual Bank
  • TrailBlazer Finance
  • Unity Bank
  • Webster Dolilta Finance Ltd
  • Westpac

Important Dates

The SME Recovery Loan Scheme builds on earlier loan schemes introduced during COVID-19.

Loans are available from 1 April 2021 until 31 December 2021.

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AnyBusiness.com.au

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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