The Coronavirus SME Guarantee Scheme will provide small and medium sized business with timely access to working capital to help them get through the impact of the Coronavirus.
Eligible lenders are currently offering guaranteed loans up to 30 September 2020 on the following terms:
• Available to SMEs, including sole traders and not-for-profits, with a turnover of up to $50 million.
• Maximum total size of loans of $250,000 per borrower.
• Loans will be for up to three years, with an initial six month repayment holiday.
• Unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
From 1 October 2020, eligible lenders will be able to offer loans during the next phase on the same terms as the current Scheme with the following enhancements:
• Loans can be used for a broader range of business purposes, including to support investment in a period of economic recovery
• The maximum loan size will be increased to $1 million per borrower.
• Loans can be up to 5 years rather than 3 years and whether there will be a six month repayment holiday will be at the discretion of the lender.
• A loan can be either unsecured or secured (excluding commercial or residential property).
Loans will continue to be subject to lenders’ credit assessment processes, with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions. The decision on whether to extend credit, and management of the loan, will remain with the lender.
As part of the loan products available, the Government is encouraging lenders to provide facilities to SMEs that only have to be drawn if needed by the SME. This will mean that the SME would only incur interest on the amount they draw down. If they do not draw down any funds from the facility, no interest will be charged, but they will retain the flexibility to draw down funds should the need arise.
Anyone interested in the Coronavirus SME Guarantee Scheme should give John a call on 0409 497202 or email firstname.lastname@example.org