Coronavirus SME Guarantee Scheme newsletter

Help Available for SMEs through Coronavirus SME Guarantee Scheme

With many businesses continuing to suffer the impact of the coronavirus with closed borders, restrictions on number of patrons and other associated costs, the Federal Government introduced the Coronavirus SME Guarantee Scheme to help a range of small to medium sized businesses.  

Phase 1 – Initial Impact

SMEs were able to access unsecured working capital loans to help them manage disrupted cash flows during the height of the pandemic. (available from 23 March 2020 to 30 September 2020)

Phase 2 – Recovery

The Scheme’s parameters have now been extended and enhanced to support businesses in recovery and to enable continued support for SMEs facing the ongoing impacts of the Coronavirus.

This phase will continue to support lenders’ ability to provide credit and ensure that SMEs benefit from low interest rates.

The second phase took effect on 1 October 2020 and will be available for loans made by participating lenders until 30 June 2021.

Eligible Businesses

SMEs, including sole traders and not-for-profits, with a turnover of up to $50 million are able to apply for loans under the Scheme.

Eligible Loan uses and Products

Lenders can offer any product suitable to the borrower, with the exception of credit cards, charge cards, debit cards or business cards. Loans issued in Phase 2 may take any other form of credit, provided the Scheme’s eligibility criteria are met.

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

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

Applying for a Loan

Loans backed by the Scheme will be available through participating commercial lenders. The decision on whether to extend credit, and management of the loan, will remain with the lender. However, the Government expects that lenders will look through the cycle to sensibly consider the uncertainty of the current economic conditions

Show Starter Loans Scheme

The Government’s $250 million COVID-19 Creative Economy Support Package includes the $90M Show Starter Loans Scheme. These loans will be delivered as part of the Coronavirus SME Guarantee Scheme, with the Government guaranteeing 100 per cent of loan amounts. This will support concessional loans to assist creative economy businesses to fund new productions and events, to be delivered through commercial lenders and supported by terms and conditions tailored to the Arts and Entertainment sector

For full details of Phase 2 of the Scheme visit the ATO Website

Further information on the Show Starter Loans visit the  Office for the Arts

If you are seeking addition financial assistance for your business to recover from the impact of COVID 19 or to expand your business for the future, please contact our experienced Commercial Finance team.

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