The Federal Government announced a $1.2 billion post-JobKeeper stimulus package with domestic travel the headline grabber.
With 600,000 jobs tied to the local tourism industry, the Government has set its course with a hedonistic approach. How very Australian. Qantas must be grinning like a cat that found the cream. The flight-led recovery takes off from April 1st.
Moving to the finer print in the Government’s post-JobKeeper stimulus package is the extension of the SME Loan Guarantee Scheme. The Government has extended and upgraded the SME Loan Guarantee Scheme. SME’s can apply for up to a $5m loan which has a ten-year term with an optional repayment holiday period. The extension of the SME Loan Guarantee Scheme is part of a $40 billion support proposal to support small and medium enterprises.
While slow to be taken up initially, more than 35,000 loans have already been provided ($3billion). The increased Government loan-guarantee (moving from 50/50 to an 80/20 split) will strengthen banks’ resolve to support small businesses. Our economic revival is riding on the backs of SME’s to keep people employed and earning a wage.
The size of the eligible loans has jumped from $1 million to $5 million. As has the turnover criterion which now allows for businesses with a turnover of $250 million to be eligible. Loan periods have been extended from five years to ten years. Keeping the ‘holiday’ theme strong in this recovery initiative, the lenders can extend borrowers a repayment holiday of up to 24 months over the course of the loan.
One of the most useful components is the ability for eligible businesses to refinance their existing loans. This flexibility will allow access to better interest rates under the program. It is hoped that small business will be better able to manage their cashflows due to lesser interest charges and extended repayment terms.
There is a burden on business owners to comply with the requirements to receive the SME Loan Guarentee Scheme. This paperwork rigour is critical in any financial transaction. If you need help in this regard, please reach out to the BridgePoint Group team who are able and willing to assist you.