The last 18 months have seen a lot of small and medium businesses (SMEs) struggle while the economy itself struggled under the weight of a global pandemic. In response, the federal government released the Coronavirus SME Guarantee Scheme designed to provide SMEs with funding to help with recovery. And recently the federal government announced that it will expand and extend the original scheme to the new SME Recovery Loan Scheme (SRLS).
This is excellent news for Australian businesses. Here’s what it means for you.
SLRS is a great option for Australian businesses. Under this scheme SMEs can use loans for a broad range of business purposes. This can include acquiring another business, purchasing commercial property or even refinancing existing loans (except for those that are more than 30 days in arrears), including those from the original SME Guarantee Scheme.
Of course, it’s still up to the lender to determine whether or not to lend money to any individual or organisation under the scheme.
The federal government designed the SME Recovery Scheme to help small and medium Australian businesses get back on their feet after the pandemic crisis. They’re showing their strong support by now taking on a 80% share of the guarantee (rather than the 50/50 split of the earlier schemes). This will encourage more banks to support SMEs. And it will provide SMEs with the funding they need to keep staff employed and the doors open.
Because loan refinancing is included, and the loan amount increased, recipients under the scheme will be better able to manage their cash flow, and be in a stronger position generally. And the government has ensured SLRS is targeted at and supports those businesses that have previously been relying on JobKeeper. That means more Aussies will stay in their jobs post the March quarter.
SLRS is increasing both bank and non-bank lenders’ ability to provide SME financing packages. This means they can provide cheaper credit and vital additional funding. Loans will be available from 1 April 2021. ANZ, CBA, Westpac, NAB and Suncorp (among many others) have each released statements supporting the scheme.
SMEs are struggling – and we’re not out of the woods, yet. Taking advantage of the new SLRS is a great option for all Australian businesses.
If you’d like some more information about how to take advantage of the SME Loan Recovery Scheme, get in touch. We’re here to help.
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