The Federal Government announced that more small businesses will be eligible to receive a loan under the SME Recovery Loan Scheme. Previously small businesses had to have received JobKeeper during the March 2021 or have been affected by floods to be eligible.
COSBOA CEO Alexi Boyd said “This is welcome news. Cashflow support is essential for small business owners who are dealing with the financial impacts of COVID-19 lockdowns. Loans are an important option to have in addition to direct cashflow support programs like JobSaver and state-government grants. Small businesses will also need time to rebuild, recover, and contribute to jobs growth after restrictions have eased; access to finance will be a critical part of this.”
Loans of up to $5 million will be available from lenders and repayable over a term of up to 10 years. The Federal Government will guarantee 80% of the loan.
Ms Boyd continued “We’re aware that this scheme relies on the banks to issue the loans to small businesses, and that there were problems associated with this in 2020. Despite the Federal Government guaranteeing 50% of the loan, some bank staff on the ground were still reluctant to lend to small business, causing considerable distress.
“COSBOA intends to work with the Federal Treasury and the banking sector to make sure that doesn’t happen this time around.”
Ms Boyd concluded “These aren’t normal times, and there are many responsible small business owners out there with viable business models who are suffering financially due to COVID-19 lockdowns. Ensuring that these businesses have access to finance while they recover is a vital part of our overall economic recovery.”