What is the SME Recovery Loan Scheme?
The purpose of the SME Recovery Loan Scheme is to support the economic recovery, and to provide continued assistance to firms currently on JobKeeper. To ensure that eligible firms will have the access to finance that they need to maintain and grow their businesses when JobKeeper ends, the Government will work with lenders.
The SME Recovery Scheme is part of the Coronavirus SME Loan Guarantee Scheme, which was launched to support up to $40 billion in lending to small and medium enterprises.
Who is eligible for the SME Recovery Loan Scheme?
As detailed on the Government’s website, the scheme is only open to recipients of JobKeeper between 4 January 2021 and 28 March 2021, specifically small and medium-sized businesses with up to $250 million turnover. Both self-employed individuals and non-profit businesses are eligible. Businesses that have accessed loans in Phase 1 and Phase 2 can also apply for loans under the scheme.
What are the changes?
Under the recently announced expansion of the scheme, the size of eligible loans will increase from $1 million to $5 million.
The loan terms will double from five to 10 years, and lenders will be able to offer borrowers a repayment holiday of up to 24 months.
Interest rates on loans are determined by lenders, but there will be a cap of around 7.5 per cent.
Loans will be available from 1 April 2021 and must be approved before 31 December 2021.
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