The federal government has announced both the extension of the Coronavirus SME Guarantee Scheme, as well as a series of “key changes” to the initiative intended to help usher businesses into the recovery phase of the COVID-19 crisis.
The scheme, which has been enabling lenders to provide eligible SMEs unsecured loans of up to $250,000 for as long as three-year terms, has seen over 15,600 businesses accept loans worth $1.5bn to date.
The initial phase of the scheme remains available for new loans issued by eligible lenders until 30 September 2020, while the second is set to commence on 1 October 2020 and will be available until 30 June 2021.The government hopes the next stage of the Coronavirus SME Guarantee Scheme will help businesses move out of hibernation, adapt to the new COVID-safe economy and invest in the future.
To this end, loans will be provided beyond the sole purpose of working capital, so that a wider range of investment can be funded come October.
Further, the maximum loan size will be increased from $250,000 to $1 million per borrower, with the maximum loan term likewise increasing from three to five years.
Additionally, secured lending will be permitted, excluding commercial or residential property. Lenders will also be given the discretion of whether or not to offer a repayment holiday period.
There are currently 41 lenders who have been approved to participate in the scheme. In addition to the first batch of 22 announced in April, the current list has grown to include:
- Community First Credit Union
- Credabl Pty Ltd
- Fifo Capital Australia Pty Ltd
- First Choice Credit Union
- Goulburn Murray Credit Union
- Hume Bank Limited
- Illawarra Credit Union
- IMB Bank
- Laboratories Credit Union
- Macquarie Bank
- Police Credit Union
- Social Enterprise Finance Australia Ltd
- South West Credit Union
- Southern Cross Credit Union
- Speedy Finance
- The Mutual Bank
- Tyro Payments Limited
- WAW Credit Union