The SME loan recovery scheme has been extended for a further six months to 30 June 2022 (from 31 December 2021). Under the extended scheme, the amount guaranteed by the Government will reduce to 50% (previously 80%) from 1 January 2022 – 30 June 2022.
SMEs with a turnover of less than $250 million who have been adversely impacted by COVID-19 may be able to access loans of up to $5 million over a term of up to 10 years. The requirement for an SME to be in receipt of JobKeeper payment between 4 January 2021 and 28 March 2021 has been removed.
Key features of the SME Recovery Loan Scheme include:
- 50% Government guarantee
- 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).
- Interest rates 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.
This article is issued as general commentary - please contact us about your specific circumstances.
