The Government has extended the SME guarantee scheme that provides a guarantee to banks to enable them to provide loans to small businesses where loans may not have otherwise been available.
Under the scheme the Government guarantees 50 percent of new loans by eligible lenders to businesses with turnover under $50m. This has allowed banks to offer loans to small businesses that might not otherwise have had access to funding.
The initial scheme expires on 30 September 2020 and was for a maximum loan size of $250,000 per borrower for an unsecured loan of up to three years with an initial six month repayment holiday.
From 1 October 2020 through to 30 June 2021 the scheme will be expanded to enable eligible lenders to provide loans under the guarantee scheme of up to $1m per borrower with loan terms of up to 5 years.