In this update we cover:
Australian Government SME Guarantee Scheme Lenders
For SME businesses impacted by COVID-19, there is a low-cost loan option available through participating banks to assist with funding for working capital during this difficult period. The Australian Government has released the names of 22 lenders who are approved for the new national $40 billion Coronavirus SME Guarantee Scheme.
Under the scheme, approved lenders can provide eligible SMEs unsecured loans of up to $250,000 for up to 3-year terms, with no repayments for the first six months. These loans are to assist with working capital to get through the impacts of the COVID-19 pandemic.
The Government guarantees 50% of each loan which translates to lower risk for the bank and lower pricing.
See below for eligibility and examples of advertised offers. The list of participating lenders is growing so please click here for an updated list as new banks are added.
The table below outlines the loan guide for SME businesses impacted by COVID-19.
Download table
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Australian Government COVID-19 SME Guarantee Scheme
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Description
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Participating banks are offering eligible SME businesses an unsecured loan of up to $250,000,
backed by a guarantee of 50% of the loan amount by the Australian Government
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Purpose
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✔
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Working capital – to pay wages, creditors, rent, rates, existing loan repayments, fuel, stock, etc
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X
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Refinance or increase existing loan
Purchase equipment/property
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Are you eligible?
Can be in any industry or service sector
Includes self-employed individuals and not-for-profits
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Are you a business with an ABN and GST-registered or incorporated non-profit organisation?
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✔
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Have you suffered a loss of income as a result of COVID-19?
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✔
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Is your annual turnover less than $50m?
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✔
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Is your business based, registered and operating in Australia?
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✔
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Would your business be viable and able to service the loan under normal business conditions?
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✔
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Do you intend to continue to operate your business after receiving the loan?
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✔
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Your business will also need to meet the individual lending criteria of the bank, which could include extra eligibility requirements – check your bank’s website for additional requirements
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Loan amount
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Minimum: No minimum Maximum: $250,000
You may only access this loan through one lender, but can apply for multiple loans totalling up to $250,000
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Term
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3 years maximum
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Interest rate
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The bank will determine interest rate, taking into account the risk share held by the Government
Indicative rates available of 4.50-5.00%pa variable
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Fees
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The bank will determine fees - no fees are permitted to be applied to undrawn facilities
Indicative fees from current banks is nil establishment and nil account keeping fees
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Monthly repayments
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First 6 months -
Remaining term -
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Nil - capitalised to the loan
P&I - to repay over remaining term
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Security
50% Government backed
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Unsecured
Personal Guarantees of Directors or Business Owners may be required by the bank
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Application
you can apply even if you’re not an existing client
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Some banks are taking applications now -
Check your bank’s website to see if they are participating
Check the Australian Government website for a list of participating banks
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Next steps
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- Check eligibility and apply online to a participating bank
- The bank will contact you to discuss and request supporting documentation
- The bank will complete an assessment - final credit decision rests with the bank
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Availability
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Available now and loan must be approved by 30 September 2020
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Questions?
Ask your bank
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Participating banks will be able to answer any questions relating to the loans
All participating banks will be published by the Australian Government on their website
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Examples of Individual Lender Offers for the Scheme
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Lender
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Var Rate pa
as at 20/4/2020
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Maximum Term
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Repayment Type
after first 6 months
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Fees
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Loan Type
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BOQ
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5.55%
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2 years
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I/O
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Nil
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Line of Credit
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CBA
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from 4.50%
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3 years
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P&I
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Nil for 6mths
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Better Business Loan
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Heritage Bank
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5.45%
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3 years
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P&I
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Nil
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Term Loan
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Liberty Financial
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4.95%
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3 years
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Doesn’t specify
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Doesn’t specify
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Doesn’t specify
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MyState Bank
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5.50%
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3 years
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P&I
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Nil
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Term Loan
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NAB
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4.50%
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3 years
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P&I
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Nil
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Term Loan
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Suncorp Bank
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‘reduced rate’
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3 years
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Doesn’t specify
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Nil
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Doesn’t specify
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Westpac
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4.48%
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3 years
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P&I
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Nil
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Term Loan
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As at 20/4/2020, the following lenders are also listed as participating but have no details on their websites yet: Australian Mutual Bank, Bank Australia, Bank of Us, Bendigo Bank, Get Capital, Judo Bank, Moula Money, On Deck Capital, Prospa, Qld Country Bank, Regional Australia Bank, Summerland Credit Union, The Capricornian Ltd and Unity Bank.
Queensland Government COVID-19 Jobs Support Loan Scheme is now closed
Due to overwhelming demand, the Queensland Government has announced the COVID-19 Jobs Support Loan scheme has now closed to new applications.
Since the scheme opened on 26 March, $187.5 million has been approved to 1,259 businesses across the state helping to support 17,298 Queensland jobs (as at 20 April).
Applications which have been received will continue to be assessed up until the $500 million funding is fully exhausted.
Other debt relief available for businesses
Participating Australian banks are allowing COVID-19 impacted businesses to defer P&I payments on existing loans for up to six months. Check with your Relationship Manager or on your bank’s website.
To be eligible, you must:
- Have business loan exposure with the bank of <$10m
- If >$3m exposure, not be in arrears for last 90 days
- Be an Australian business with <80% foreign ownership
- If a commercial landlord, undertake not to end leases or evict tenants for non-payment due to COVID-19
Other relief is available such as waived merchant fees.
Lender Hardship Support Contacts
It is a difficult time for us all and many people are concerned about the impact of COVID-19 on their ability to repay debt.
Don’t put off contacting your bank
All lenders have hardship teams ready to help.
Click on the relevant lender’s link in the table below to learn how they can assist. Lenders are reporting lengthy delays on the phone and recommend you apply online.
We’re here to help
Visit BDO’s COVID-19 Stimulus Measures for summaries of all the latest support available to individuals and businesses.
If you need assistance, please contact BDO’s Finance Solutions Team, we’re here to help.
Prepare your organisation
How can your organisation respond to Coronavirus (COVID-19)?
Find out more