As part of the government’s economic response to the Coronavirus, the Coronavirus SME Guarantee Scheme provides support for small businesses to access credit.
The $40 billion scheme is backed by the government, who cover 50% of the risk, with the remaining 50% covered by the lender for new unsecured loans to be used for working capital.
What we know so far
- Businesses with a turnover of up to $50 million will be eligible to receive these loans
- Loans are up to $250,000 per operating business.
- The loans will be up to 3 years, with an initial 6 month repayment holiday. They must be repaid within the three year time period
- The loan will be in the form of unsecured finance. This means that businesses will not need to provide an asset as security.
- These are loans, not grants. Criteria, fees and interest rates will differ by each lender.
- The Scheme will be available for new loans made by participating lenders until 30 September 2020
- The Government is yet to finalise the list of participating lenders. This will be published on the Treasury’s webpage.
If you are looking for financial support for your business, the more information you can provide to a bank or other lender, the better.
It is likely that you will need to provide proof that you can repay the loan. This will involve up-to-date financials including trading figures up until lockdown and a business plan that shows the future sustainability of your business.
Talk to us about your business plan. We can assist you with the financials and guide you through available funding options.