An overview of phase three of the SME Recovery Loan Scheme

This insight was originally published 14 December 2021, and updated on 24 May 2022.

Update, May 2022: With the extended scheme coming to an end, the major banks have advised of the following lodgement dates in order for applications to be unconditionally approved and documented by the 30 June deadline:

  • NAB: 13 May 2022 (closed)
  • Westpac: 1 June 2022
  • ANZ: 3 June 2022
  • Commonwealth Bank: 17 June 2022

Contact your local adviser for assistance or further information.

The Federal Government has announced an extension to the SME Recovery Loan Scheme for COVID-19 impacted businesses, as part of its commitment to supporting lending to Small to Medium Enterprises (SMEs).

Phase three of the scheme was due to expire on 31 December 2021, but under the proposed extension loans will be available from 1 January 2022 until 30 June 2022 with a reduced Government guarantee of 50 per cent.

Who does the scheme benefit?

The scheme is open to SMEs with up to $250 million turnover, including self-employed and not-for-profits.

The existing scheme specifically targeted businesses that received the JobKeeper payment for the March 2021 quarter and was extended to include businesses impacted by the March 2021 floods in specified disaster zones in New South Wales and Queensland. 

Under the extension proposal, eligibility will be extended to businesses adversely economically affected by COVID-19 from 1 October 2021.

What does the scheme provide?

The existing scheme provides access to 80 per cent government-backed, low-cost bank loans of up to $5 million at attractive terms (potentially with capitalising interest/repayment holidays for up to 24 months) from participating lenders.

Loans approved under the proposed scheme extension will have a government guarantee of 50 - not 80 - per cent.

Rates are determined by lenders, depending on factors such as the available security, loan term and whether repayment holidays apply. At the time of publishing, the Big 4 banks had the following offers in place:

  • Westpac - Secured loan rates start at 2.58% pa for three or five years or 4.28% pa for 10 years
  • CBA - Secured loan rates start at 2.60% pa and unsecured at 3.25% pa, with higher rates applying to loans with repayment holidays
  • NAB – Secured loan rates start at 2.80% and unsecured at 3.95%, subject to criteria
  • ANZ – Closed to new applications (this may change with extension announcement)

The complete list of approved participating lenders can be viewed on The Treasury website.

The scheme, in a nutshell


From 1 October 2021 (Scheme expansion date) to 30 June 2022

Applicant eligibility


  • SMEs adversely economically affected by COVID-19
  • SME businesses with a maximum $250 million turnover
  • Self-employed individuals and/or non-profit businesses may apply

Loan amount

Loan amounts have no minimum, but are capped at $5 million (in addition to phase one and phase two loan limits).

Type of loan


Loans include:

  • Term loans
  • Overdrafts
  • Working capital and revolving facilities
  • Leases
  • Hire purchase agreements.

Cannot include:

  • Credit card
  • Debit card
  • Charge card or business card facilities.

Loan pricing


Loan pricing will be advised by the lender, but will be capped (allowing for movement if variable).

Eligible loan purposes


Any business purpose


Refinancing existing business loans


A broad range of businesses purposes (including to support investment)


Purchase of residential property


Purchase of financial products


Lending to an associated entity


Lease, rent, hire, hire-purchase existing assets more than halfway into their effective life



  • Both unsecured and secured lending
  • Lenders may take guarantees
  • For secured loans, any security except residential property
  • 50 per cent government-backed

How to apply

Application is through participating lenders and loans will be assessed under individual lender criteria.

More information


Think you might be eligible?

If you meet the criteria for the scheme, there could be value in confirming your eligibility and applying for support. With eligible loan purposes focused on activities directly linked to your SME, it could be a way to invest in the future growth of your business.

Every business is different, so it is important to seek advice to determine whether the scheme meets your funding needs and business structure. BDO’s Finance Solutions experts can assist, so contact your local adviser to discuss your options or learn more about the SME Recovery Loan Scheme.

Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.

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