Federal government expands eligibility for SME Recovery Loan Scheme

The federal government has announced additional support for small- and medium-sized businesses (SMEs) that continue to deal with the economic impacts of the COVID‑19 crisis.

Announced on Wednesday, the government will remove requirements for SMEs to have received JobKeeper during the March quarter of 2021 or to have been a flood-affected business in order to be eligible under its SME Recovery Loan Scheme.

As with the existing scheme, SMEs who are dealing with the economic impacts of the coronavirus with a turnover of less than $250 million will be able to access loans of up to $5 million over a term of up to 10 years.

Under the scheme, the government guarantee will be 80 per cent of the loan amount, and lenders are allowed to 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.

They can also be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme.

The loans can be either unsecured or secured (excluding residential property), and will be available through participating lenders until 31 December 2021. More info can be found on the Treasury website.

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