An overview of phase three of the SME Recovery Loan Scheme

08 April 2021

Marie Ryan, Associate Director and Accredited Finance Broker, Finance Solutions |

The Federal Government has launched phase three of the SME Recovery Loan Scheme, as part of its commitment to supporting up to $40 billion in lending to Small to Medium Enterprises (SMEs).

Who does the scheme benefit?

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

What does the scheme provide?

The scheme will provide access to 80% 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.

The major banks have released limited information about their offers, with rates 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 announced the following:

  • Westpac - Secured loan rates start at 2.58% pa for three or five years or 3.48% 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 and ANZ - Confirmed they will be participating, however rates are yet to be announced. 

The complete list of participating lenders is yet to be announced.

The scheme, in a nutshell


Available now until 31 December 2021

Applicant eligibility


  • Recipients of JobKeeper payment in the March 2021 quarter or businesses affected by the March 2021 floods in eligible area (disaster zone)
  • SME businesses with a maximum $250 million turnover
  • Self-employed individuals and/or non-profit businesses may apply
  • Businesses that accessed SME Guarantee loans in phase one and phase two 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 at 7.50% pa (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
  • 80% government-backed

How to apply

Applicants can apply through participating lenders, although limited details have been released. 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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