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Article:

COVID-19 finance update

21 April 2020

Marie Ryan , Accredited Finance Broker, Finance Solutions |

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

Australian Government COVID-19 SME Guarantee Scheme

Description

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

Purpose

Working capital – to pay wages, creditors, rent, rates, existing loan repayments, fuel, stock, etc

X

Refinance or increase existing loan
Purchase equipment/property

Are you eligible?

Can be in any industry or service sector

Includes self-employed individuals and not-for-profits

 

Are you a business with an ABN and GST-registered or incorporated non-profit organisation?

Have you suffered a loss of income as a result of COVID-19? 

Is your annual turnover less than $50m?

Is your business based, registered and operating in Australia?

Would your business be viable and able to service the loan under normal business conditions?

Do you intend to continue to operate your business after receiving the loan?

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

Loan amount

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

Term

3 years maximum

Interest rate

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

Fees

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

Monthly repayments

First 6 months   -
Remaining term -

Nil - capitalised to the loan
P&I - to repay over remaining term

Security

50% Government backed

Unsecured
Personal Guarantees of Directors or Business Owners may be required by the bank

Application
you can apply even if you’re not an existing client

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

Next steps

  • 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

Availability

Available now and loan must be approved by 30 September 2020

Questions?

Ask your bank

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

Examples of Individual Lender Offers for the Scheme

Lender

Var Rate pa

as at 20/4/2020

Maximum Term

Repayment Type

after first 6 months

Fees

Loan Type

BOQ

5.55%

2 years

I/O

Nil

Line of Credit

CBA

from 4.50%

3 years

P&I

Nil for 6mths

Better Business Loan

Heritage Bank

5.45%

3 years

P&I

Nil

Term Loan

Liberty Financial

4.95%

3 years

Doesn’t specify

Doesn’t specify

Doesn’t specify

MyState Bank

5.50%

3 years

P&I

Nil

Term Loan

NAB

4.50%

3 years

P&I

Nil

Term Loan

Suncorp Bank

‘reduced rate’

3 years

Doesn’t specify

Nil

Doesn’t specify

Westpac

4.48%

3 years

P&I

Nil

Term Loan

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.

Online application Phone number
AMP 133 030
ANZ 1800 351 548
ABAL Banking 1800 646 484
Auswide 1300 077 969
Bank Australia 132 888
Bank of China 1800 095 566
Bank of Melbourne 1800 600 266
BOQ 1800 079 866
Bank of Sydney 139 500
BankSA 1300 369 415
Bankwest 131 719  Bus: 137 000
Bendigo Bank 1300 652 146
Better Choice 1300 334 336
Bluebay Home Loans 1300 258 229
Bluestone 132 583
Capital Finance 1300 300 309
Citi 1800 722 879
CBA 133 095  Bus: 132 607
Connective Advance 1300 781 043
Connective Essentials 1300 543 558
Connective Prime 1300 349 166
Connective Smart Options 1300 368 908
Connective Solutions 1800 356 383
Connective Select 1300 650 259
Firstmac 1800 651 898
Gateway Bank 1300 302 474
GetCapital 1300 249 649
Heritage Bank 1300 726 100
HomeStart Finance 1300 636 878
HSBC 1300 555 988
IMB Bank 133 462
ING 1300 349 166 or 133 464
Judo Bank 135 836
Keystart Home Loans 1300 578 278
La Trobe 138 010 or 1800 620 639
Latitude Financial 1800 220 718
LJ Hooker Home Loans 1300 515 200
LoanAve email 1300 562 628
Macquarie Bank 1300 363330 Bus: 1800 620673
ME Bank 131 563
Metro Finance 1300 362 627
MKM Capital 1300 762 621
MyState Bank  138 001
NAB 132 265   Bus: 131 012
Newcastle Permanent 131 987
On Deck 1800 676 652
P&N Bank 132 577
Paramount Mortgages 1300 799 399
Pepper Money 1800 356 383
Prospa 1300 882 867
Rabobank 1800 025 484
RateSetter 1300 768 710
Resimac 1300 793 741
Rural Bank 1300 660 115
Scottish Pacific email 1300 207 166
St. George Bank 1800 629 795
Suncorp Bank 1800 225 223
Teachers Mutual 1800 862 265
Thorn Business Email 1800 623 611
U Bank 133 080
Virgin Money 1800 701 997
Westpac 132 032   Bus: 132 142
WISR 1300 992 007
Other Handy COVID-19 Resources
ABA Australian Banker’s Association
ASIC - MoneySmart Financial guidance and tools
ATO SME resources and tools
Aust Government business Government business support
Aust Government personal Government personal support
BDO in Australia COVID-19 resources and tools
Aust Government Health COVID-19 health information
Human Services (Centrelink) Support for individuals
Lifeline 24/7 Help line Phone 131 114
National Debt Helpline Phone 1800 007 007

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