The SMB Recovery Loan Program has been redesigned to help companies in trouble stay afloat


The federal government has changed its SME restructuring loan so that more companies can access cheaper loans and additional financing.

The SME Recovery Loan Program has been refocused to fund eligible small and medium-sized businesses through December 31, 2021.

The program was launched to strengthen the economy and continuously provide relief to companies hit by lockdowns or floods earlier this year.

The previous eligibility requirements for access to this financial assistance have been removed to better reflect the recent economic impact of the coronavirus.

The Scheme Rules will be changed to reflect the updated eligibility criteria, and credit will be available from that date, according to the federal government.

The program “improves” the ability for lenders to provide cheaper credit and gives small and medium-sized businesses access to additional funding.

The government said it will work with lenders to ensure eligible businesses have access to finance to sustain and grow their businesses.

Financial support for companies in trouble

According to the federal government, the participating lenders will offer the following guarantees as part of the updated scheme.

  • The state guarantee is 80% of the loan amount.
  • Lenders are allowed to grant borrowers a repayment vacation period of up to 24 months.
  • Loans can be used for a variety of business purposes, including helping with investment.
  • Loans can be used to refinance existing debts of an eligible borrower, including those from the SME Guarantee Program.
  • Borrowers can access up to $ 5 million in total in addition to the Phase 1 and Phase 2 credit limits.
  • Loans have a term of up to 10 years, with an optional repayment period.
  • Loans can be either unsecured or secured (excluding home ownership).
  • The interest rate on loans is set by the lenders but is capped at around 7.5%, with floating rate loan rates being flexible to increase as market rates rise over time.

Westpac and NAB have “welcomed” new changes

Westpac and NAB have already jumped on the new announcement, saying they welcome the changes and will continue to support companies in distress due to lockdowns.

Andrew Irvine, NAB Group Executive Business & Private Bank, said SMB recovery loans are a “good option” for companies in need of additional capital and that expanding the eligibility criteria is a “positive move”.

“Many small businesses across Australia continue to do things tough due to the impact of prolonged lockdowns and border closings,” Irvine said.

Westpac CEO Peter King said the SMB recovery loans help keep businesses going.

“We encourage all business customers who are concerned about their finances to give us a call so we can see what help may be available to them,” said King.

Participating Lenders

According to the federal government, the following lenders are currently participating in the SME loan recovery program.

  • ANZ
  • Bank of Queensland
  • Commonwealth Bank of Australia
  • Fifo capital of Australia
  • Get capital
  • Judo bench
  • Liberty finance
  • Moneytech finance
  • National Australian Bank
  • Regional Australian Bank
  • Funding social enterprise in Australia
  • South West Credit Union Cooperative
  • Suncorp Metway
  • The mutual bank
  • TrailBlazer Finance
  • Unified bank
  • Webster Doilta Finance Ltd
  • Westpac

Image from 99.films on Unsplash


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