2021 SME Recovery Loan Scheme

Buried at the end of the QantasKeeper announcement of 800,000 half price flights last week, was an announcement of the new 2021 SME Recovery Loan Scheme.

This scheme is targeted specifically to businesses who are recipients of the JobKeeper payment between 4 Jan and 28 Mar 2021 and your annual revenue is less than $250 million. Both self‑employed individuals and non-profit businesses are eligible.

Under this scheme:

the Federal Gov’t will guarantee will be 80% of the loan amount (up from 50% under the old scheme).
You can have a repayment holiday of up to 24 months (interest will still accrue).
Loans of up to $5m can be used to pay out existing debts. Note loan can’t be credit or charge card based.
Loan term can be up to 10 years and be unsecured.
Interest rate is capped at around 7.5% (can be lower)

Loans are said to be available from 1 April 2021, but knowing how the banks work, it may take them a bit longer to have this available to frontline staff. The loan must be approved by 31 December 2021.

If your business is currently on JobKeeper, this may be enough to buy you the time to keep your business afloat. Approach your bank now to make sure you are in position on 1 April 2021 to lodge all the required paperwork and documentation.

If you want more information visit https://treasury.gov.au/coronavirus/sme-recovery-loan-scheme

If you want some help, contact me below.

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