The Federal government has moved to extend the SME Recovery Loan Scheme, providing small and family businesses with critical access to finance as they work to get back on their feet.
Under the extended scheme, SMEs impacted by the pandemic with a turnover of less than $250 million can access loans of up to $5 million over a term of up to 10 years.
The move has earned widespread approval parties, with the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, saying that small and family businesses are well-positioned to lead the national economic recovery as pandemic-related trading restrictions ease with the help of targeted and ongoing support from the Australian Government.
“Small businesses are working hard to get their businesses back up and running after a very challenging couple of years,” Billson said. “The good news is that COVID-19 conditions are finally settling and that is allowing small business owners to get on with what they do best – growing their business.
“The extension of the SME Recovery Loan Scheme will offer much-needed cashflow to small businesses, giving them a fighting chance at returning to full strength,” Billson added. “With the Australian Government guaranteeing 50 per cent of loans secured under the scheme, we hope this will increase lender appetite, particularly with a focus on growth and investment lending.
“We really want to see lenders make loans more accessible to small and family businesses, especially for those with clear growth and innovation plans and for ambitious new-to-bank customers seeking finance,” Billson continued. “Finance is the oxygen of enterprise and those with growth and investment ambitions need additional support. It is support for small businesses such as the SME Recovery Loan Scheme, that is contributing to making Australia the best place to start, grow and transform a business.”
Major lenders added their support. CBA Group Executive Business Banking, Mike Vacy-Lyle, described the scheme as an “important measure for Australian small businesses [that] is playing a pivotal role in the country’s economic recovery”.
“We are very supportive of the extension of the scheme to allow more businesses to take advantage of this low cost funding as we head towards the New Year,” Vacy-Lyle said. “As the nation reopens, it’s fantastic to see recovery across the sector with many small businesses taking advantage of pent up customer demand and investing for future growth. At the same time, we know some businesses have experienced uneven recovery and continue to need additional support to re-stock, re-hire and generally, get back to business.”
And Chris de Bruin, Chief Executive of Consumer and Business Banking at Westpac, said, “This scheme has been a real lifesaver for businesses hit hard by COVID lockdowns, so it’s great to see it extended…In recent weeks, we’ve seen a 160 per cent week-on-week increase in applications, with the average deal size doubling since September.”