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COVID Small Business Relief and How to Get It

Background

With SME’s (Small and Medium Enterprises) still reeling from on and off again lock-downs across the nation, the government has put in place the SME Recovery Loan Scheme (the Scheme) to provide financial assistance to businesses suffering from COVID related lock-downs.  Previously only flood affected businesses or businesses who’d received Job Keeper were eligible to apply for the Scheme but as of the 25th of August 2021, the government has removed those criteria.  Read on to find out what the Scheme entails and if you’re business is eligible.

What Is The Scheme?

The Scheme came into effect of 1 April 2021 and is a government backed initiative with selected lenders to provide Australian business with access to low interest rate loans.  The scheme is geared towards assisting eligible businesses to recover financially who’ve been negatively affected by lock-downs across Australia and ends on the 31st of December 2021.  Successful applicants can obtain loans to help them invest and plan ahead.

Whose Eligible?

Small and medium sized businesses, self-employed and non-profits are all eligible to apply provided they have a turnover that doesn’t exceed $250 million per annum.  Business must be able to demonstrate that they have been financially impacted by COVID lock-downs.

Scheme Features

The government guarantees 80% of the loan amount and borrowers can apply for a repayment holiday of up to 24 months on top of a 10 year loan term.  Loans can be used as a means of investment support or to refinance an already existing debt.   Borrowers can access up to $5 million.  Interest rates differ according to lenders but don’t exceed 7.5%.

Exclusions

Loans under the Scheme cannot be used for the purchase of residential property or financial products, cannot be lent to an associated entity or used to “lease, rent, hire or hire purchase existing assets that are more than half-way into their effective life”, https://treasury.gov.au/coronavirus/sme-recovery-loan-scheme.

More Info

For more detailed information please consult https://treasury.gov.au/coronavirus/sme-recovery-loan-scheme.  Additional terms and conditions apply.

If you’d like help working out if your small or medium sized enterprise is eligible for the Scheme, give us a call, we love to help.

Written by Jason Pestano