With the recent end to Job Keeper payments, you might be in search of some extra funding to inject into your business’s cash flow whilst ramping back up. COVID-19 has affected all of us in unique ways, however as a consensus a lot of the small business owners we have spoken to lately are in the same boat, needing additional cash to fund recovery.
We’ve also received a lot of questions regarding the Australian Government’s SME Recovery Loans Scheme, while we are not a part of this program, we thought we would put together an article to help Small Business Owners understand how it works.
What are Government Recovery Scheme Loans?
The Government is working with select lenders to enhance their ability to provide credit to small business owners. According to the Australian Government,
“SME Recovery Loan Scheme is designed to support the economic recovery, and to provide continued assistance, to firms that received JobKeeper and also to firms that are eligible flood-affected businesses.”
The latest version of these loans are currently available until 31st December 2021, with a maximum amount of $5 million and terms up to 10 years. The government has said that the maximum period that a borrower may take a repayment holiday is 24 months. It is expected that borrowers taking repayment holidays will have interest and fees accrued during the deferral period and capitalised at the end of that period.
Is my business eligible?
The scheme is only open to recipients of the JobKeeper payment between 4 January 2021 and 28 March 2021 and businesses that are located or operating in eligible Local Government Areas (LGAs) impacted by the floods in March 2021.
Loans backed by the Scheme will be available through participating commercial lenders. The decision on whether to extend credit, and management of the loan, will remain with the lender. Both secured and unsecured loans will be on offer.
How can the loans be used?
Loans can be used for a broad range of business purposes, including to support investment such as hiring of new staff, purchasing inventory or stock, and business asset purchases. Loans may be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme. They can not be used to lease, rent, hire, hire-purchase existing assets that are more than half way into their effective life.
What are my other options?
We’ve spoken with many SME’s who unfortunately didn’t qualify with one of these loans with their regular bank. In this situation fintech lenders, such as Funda, may be in a position of offer you the funds you need to maintain or grow your business.
Chat with us.
We offer assessment in 24 hours, with a simple and quick online application. If your business is approved for a Funda Business Loan, it is possible to receive funding on the same day. We understand that cash flow is even more imperative in these trying times, that’s why we aim to cut the red tape and waiting times to help even more SME’s achieve their 2021 goals.
Please note this information is of general nature only. We always advise you speak with trusted professionals. More information on the loan scheme can be found here: https://treasury.gov.au/coronavirus/sme-recovery-loan-scheme