The federal government has expanded its small business recovery loan program, removing requirements for businesses to have received JobKeeper this year or to have been affected by flooding.
The easing of eligibility requirements is in response to the continuing effects of COVID-19, Treasurer Josh Frydenberg said in a statement.
Under the new guidelines, the loan program will continue to provide access to loans of up to $ 5 million over 10 years to SMEs with sales of less than $ 250 million and experiencing financial difficulties due to the effects of the coronavirus.
The federal government will guarantee 80% of the loan amount, which participating lenders can offer in the form of secured or unsecured loans.
The loan program also allows lenders to offer borrowers a repayment holiday of up to two years.
Businesses can use the loans to cover a range of business expenses, such as supporting investments and refinancing pre-existing debt, including SME Guarantee Program debt.
The announcement was well received by small business associations and lenders participating in the program.
Mark McKenzie, chief executive of the Australasian Convenience and Petroleum Marketers Association (ACPMA), said the expanded loan program will bring “precious relief” to hundreds of small family fuel retail businesses.
McKenzie said gas station businesses in NSW and Victoria have experienced a 55% drop in fuel sales as a result of the current lockdowns, while many businesses in regional areas have reported declines of up to 75%. .
“This initiative will allow these businesses to restructure their finances and withdraw the cash they need to survive the foreclosure, without putting their family home at risk,” he said.
Wespac, one of the 18 lenders participating in the program, also praised the expansion of the loan program.
Peter King, chief executive of Westpac, said in a statement that the updated program will help small businesses affected by COVID-19 access low-rate financing with the ability to defer payments for up to two years.
“We encourage all business customers who are concerned about their finances to give us a call so that we can determine what assistance may be available to them,” King said.
The revised loan program will be available from participating banks until December 31, 2021.