The Australian Government’s Coronavirus SME Guarantee Scheme is set to help small and medium sized businesses impacted by COVID-19 with new initiatives and investment. The Government will be guaranteeing 50 per cent of new unsecured loans up to $250,000 . What’s more, with non-bank lenders like Prospa on board, business owners could have access to lending much faster.
The Coronavirus SME Guarantee Scheme – are you eligible?
Government’s new loan scheme will support up to 40 billion dollars of lending to SME’s, including sole traders and not-for-profits. Under the scheme, Government will guarantee 50 per cent of new loans issued to eligible SMEs. The scheme is set to help these businesses access working capital to help them get through the impact of the Coronavirus and is available until 30 September 2020.
The scheme is aimed at supporting SMEs and includes:
• Sole traders with a turnover of up to $50 million
• A maximum total loan size of $250,000 per borrower
• Up to three years’ loan term with an initial six month repayment holiday
• Unsecured finance which means borrowers will not have to provide any security for the loan
While the decision on whether or not to extend credit will remain with the lender, Government expects lenders will look ahead and take into account the current economic uncertainty when determining lender ability. Government will also encourage lenders to provide facilities to SMEs that only have to be drawn if needed, which means interest will only be charged on the amount drawn down.
Accessing the scheme – how do you apply?
Mortgage Express non-bank lending partner Prospa has been included in the government’s scheme, and SMEs interested in the Coronavirus SME Guarantee Scheme should contact their Mortgage Express broker for more information.
According to small business ombudsman, Kate Carnell, including non-bank lenders such as Prospa in the government’s SME loan guarantee scheme, should help businesses in need to get working capital loans even faster than through the usual channels of the mainstream lenders.
"The thing that's good about these guys is they are used to lending unsecured and they are used to lending quickly," Ms Carnell said.
As a participating lender in the Government’s Coronavirus SME Guarantee Scheme, Prospa can assist with a range of lending options and will be releasing two new products developed in accordance with the Scheme – a Back to Business Loan and a Back to Business Line of Credit to be rolled out over the coming weeks.
The Back to Business products will provide funding to eligible SME customers of up to $250,000 over terms of up to 3 years with no asset security and no repayments for the first six months*.
Get in touch with our team if you’d like to find out more about or to access the Coronavirus SME Guarantee Scheme.
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