Small businesses set to benefit from new loan scheme

In an effort to ensure small and medium sized businesses have access to the cheap finance they need to survive the pandemic, a new SME loan guarantee scheme has been launched, which includes ten-year loans of up to $5 million, with the option of a 24-month repayment holiday.

Australian banks are working with the Government to deliver the loans, which will be available to businesses which have been on JobKeeper between 4 January and 28 March.

It is hoped that the scheme will fill the JobKeeper wage subsidy gap, which ends later this month.

Anna Bligh, Australian Banking Associate CEO said: “This is the right product for the times. It includes more flexibility, and will allow small businesses to re-stock, rebuild and recover.

“The new phase of the scheme will make more businesses eligible and allow banks to provide more funding and support to businesses, particularly those still doing it tough.”

The Council of Small Business Organisations Australia (COSBOA) was also broadly positive about the scheme.

Peter Strong, CEO of COSBOA said: “This sends a message to businesses that wish to perhaps expand their manufacturing base, or those businesses that are still going through a difficult time but know they have a viable business, that they can go to their bank and openly discuss their situation. It provides the flexibility that business people will need in these difficult times.”

However, he cautioned that the loans won’t be given out in order to pay wages. In an interview with ABC television, he said: “They will give you a loan if you have got a good busines plan and you have got a good track record…That will keep people in jobs.”

If you need help or advice for you or your business, please contact your local TaxAssist Accountants. We’re here to support you through the pandemic and beyond.

Date published 12 Mar 2021