SME Recovery Loans
Has your business been affected by the covid pandemic?
If so, you might be able to qualify for a government-backed loan through the SME Recovery Loan Scheme.
Speak to us about a government-backed loan of up to $5m for your business.
Under the SME Recovery Loan Scheme, the federal government is guaranteeing 80% of the loan amount for eligible business loans. That makes it easier to qualify for finance.
Your business can use an SME Recovery Loan Scheme loan for “a broad range of business purposes”, according to the government.
That includes to:
- Buy non-residential property
- Invest in assets, such as plant and equipment
- Refinance another loan (including one already secured through the SME Recovery Loan Scheme)
However, loans can’t be used to:
- Buy residential property
- Buy financial products
- Lend to an associated entity
- Lease, rent, hire or hire-purchase existing assets that are more than halfway into their effective life
We apply our extensive knowledge to find a solution that is right for you and guide you throughout the loan application process.
How much can you borrow under the SME Recovery Loan Scheme?
Your business can borrow up to $5 million.
The lender will determine the interest rate, but it “will be capped at around 7.50%, with some flexibility for interest rates on variable-rate loans to increase if market interest rates rise over time”, according to the government.
Other features of the SME Recovery Loan Scheme include:
- Lenders can offer repayment holidays of up to 2 years
- Loan terms can be up to 10 years (including any repayment holiday)
- Loans can be unsecured or secured (excluding residential property)
Which businesses are eligible for the SME Recovery Loan Scheme?
To qualify for the SME Recovery Loan Scheme, your business must have a turnover of less than $250 million and must’ve been “adversely economically affected” by the pandemic.
Under an earlier version of the scheme, which ran from 1 April 2021 to 30 September 2021, businesses could qualify only if they met the conditions above and they’d:
- Received a JobKeeper payment between 4 January and 28 March 2021
- Been affected by floods in March 2021
However, the JobKeeper and flood criteria no longer apply.
Why you should get help from a finance broker
As with any business loan, it makes sense to consult a finance broker if you’d like to take advantage of the SME Recovery Loan Scheme. There are two good reasons why.
First, not all lenders are participating in the scheme – a finance broker will know which ones are.
Second, just because the government is guaranteeing 80% of the loan, doesn’t mean lenders are easing their lending criteria or you’re certain to get a loan.
A finance broker will be able to structure your application in such a way as to maximise your chances of approval.