Government-backed business loans
Find out what government-backed loans are available for your business during the COVID-19 pandemic.
On 22 March 2020 the Australian government unveiled its second wave stimulus package aimed at helping Aussies survive the impact of COVID-19 on the economy. Out of this package has come a scheme that will see government backed business loans in which the government guarantees 50% of new loans for small businesses from participating banks and lenders. This will provide much-needed working capital of up to $40 billion to businesses.
- Coronavirus SME Guarantee Scheme update
Good news for businesses - the Coronavirus SME Guarantee Scheme is due to be extended. While the current phase of the scheme is set to end on 30 September 2020, the Australian Government will be initiating a second phase from 1 October 2020 to 30 June 2021.
Exact details of how the second phase of the scheme will work are yet to be released. However, the extended scheme aims to continue to support lenders' ability to provide credit and ensure that SMEs recover from coronavirus by benefitting from lower interest rates.Details of the second phase of the scheme are set to be finalised in the coming weeks.
What is a government-backed business loan?
A government-backed business loan is a loan that the government provides a guarantee to the lender on. For COVID-19 government-backed business loans, this guarantee is 50% of the funding amount. Having a partial guarantee on the funds means that lenders are able to offer loans to customers at lower rates. It also means that lenders can be less stringent than they may normally be with their lending criteria. This therefore enables lenders to offer more loans to people in need who may not have otherwise qualified for funding.
Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme
The COVID-19 government-backed business loans, known as the Coronavirus SME Guarantee Scheme, are loans of up to $250,000 that are available to eligible Australian SMEs. These loans will all be unsecured with terms of up to three years and no repayments will be required for six months. On top of this, businesses will only be charged interest on the amount that they draw down. No interest will be charged on unused funds. The loans will also have no establishment or monthly fees attached.
Rates for loans under the scheme will differ depending on the lender and the circumstances of the borrowing business, but generally these loans will have lower rates than standard business loans.
When will the Coronavirus SME Guarantee Scheme loans be available?
Loans under the Coronavirus SME Guarantee Scheme will be available from early April until 30 September 2020. The exact date the loans launch will vary somewhat depending on the participating lender.
How do I qualify?
To qualify for a government-backed business loan your business must have an annual turnover of less than $50 million.
Which banks are offering government-backed business loans?
The following banks are offering government-backed loans, as well as other forms of financial assistance, to support small businesses affected by COVID-19:
|ANZ has confirmed that it will be participating with the scheme and applications are now open. New business loan customers can apply for loans under the scheme in the form of:|
Other ANZ COVID-19 support measures include:
Bank of Queensland
|The Bank of Queensland is offering up to $250,000 in unsecured overdrafts for new and existing business customers under the Coronavirus SME Guarantee Scheme.|
BOQ is also offering the following measures to support existing business loan customers:
Bank of us
|The Bank of us is offering Tasmanian businesses access to overdrafts up to $25,000 at a rate of 5.49% p.a. to support them through the upcoming months under the Coronavirus SME Guarantee Scheme. The loans are subject to normal Bank of us credit assessment processes.|
Bank of us are also offering the following support to existing business loan customers:
|Bankwest is also providing lower rate government backed loans that comply with the terms of the scheme that are now available to new business customers affected by COVID-19.|
Other support measures to business customers affected by COVID-19 from Bankwest include:
Bendigo and Adelaide Bank
|Bendigo and Adelaide Bank's new business loans under the SME Guarantee Scheme are effective as of 3 April 2020.|
In addition to providing these loans, other coronavirus relief measures for businesses include:
|CommBank announced that it is making up to $10 billion in funds available for extra small business loans in line with the scheme. The bank also said that interest rates on the new unsecured loans would have 5% p.a. lower interest rates than normal.|
In addition to these measures, CommBank also has these relief measures in place:
|Customers can apply for a business overdraft, term loan or a working capital facility with GetCapital under the scheme. The business overdraft is a revolving facility, where you only draw down on what you need and incur interest (deferred for the first 6 months) on the amount used. The term loan and working capital facility give successful applicants immediate access to approved funds in a single lump sum, with an online redraw option. Interest is capitalised and interest rates vary.||More info|
|Heritage Bank is now offering government backed business loans under the Coronavirus SME Guarantee Scheme and applications are now open. New and existing applicants can apply. Details are:|
Heritage also offers the following COVID-19 relief measures:
|Under the Coronavirus SME Guarantee Scheme, IMB Bank's small business customers and sole traders can access loans of up to $75,000 on terms of up to three years with a six month repayment deferral.|
|Judo Bank recently announced that it will also be participating in the scheme by providing a range of business lending solutions to SMEs affected by coronavirus.||More info|
|Liberty is offering business care loans from $25,000 to $250,000 (with repayments deferred for 6 months and interest capitalised) in line with the Coronavirus SME Guarantee Scheme.|
It is also offering the following help to existing business customers:
|Lumi is offering new and existing customers a small business loans and business lines of credit available from $2,000 to $250,000 in line with the scheme. Borrowers do not need to make repayments for the first 6 months.|
The non-bank small business lender is also offering case-by-case assistance to existing customers affected by COVID-19.
|Macquarie Bank have been approved to offer loans under the Coronavirus SME Guarantee Scheme.|
Existing business customers for Macquarie Bank can also have access to:
|Moula is also participating in the scheme, with loans available now to new business customers.|
Additional help to existing business customers from Moula includes:
|Under the scheme, MyState are offering new and existing business loan customers access to loans of up to $250,000 with concessional repayment terms. Loans will be available at a variable interest rate of 5.5% p.a. with no additional fees. Over the 6 month repayment holiday, funds from approved loans can be drawn down in 3 instalments.|
Additional support for existing business loan customers of MyState Bank include:
|OnDeck Capital are offering new and existing customers business loans under the Coronavirus SME Guarantee Scheme. OnDeck's loans are customised as per each individual business' needs. Repayment deferral periods with these loans will vary. The total interest payable is set out at the start of each loan|
In addition to these loans, OnDeck is offering support to its customers who have been affected by COVID-19 on a case-by-case basis.
|NAB has also agreed to partake in the government's Coronavirus SME Guarantee Scheme. Business loans up to $250,000 will be available from NAB at a rate of 4.5% p.a. with no repayments for the first six months.|
The following relief measures are also already in place:
Prospa is offering access to business funding of up to $250,000 through 2 different products with no repayments for the first 6 months to support business' cash flow needs.
Prospa's loan options include:
Back to Business Loan
A lump sum of up to $250,000 to cover one-off cash flow needs
Back to Business Line of Credit
Ongoing access to funds of up to $250,000 to manage day-to-day cash flow
If you're applying for a Prospa Back to Business Loan, you'll need to demonstrate monthly turnover figures and that you have been trading for at least 24 months. You'll also need an active ABN, your business bank account details and driver's licence details. For larger loan amounts, further business financials may be required.
Queensland Country Bank
|Queensland Country Bank are offering loans to businesses in line with the Coronavirus SME Guarantee Scheme. For full details of these loans, contact the lender directly.|
Additional measures to assist customers affected by coronavirus include:
Regional Australia Bank
|Regional Australia Bank are also offering loans in line with the scheme. Contact the bank directly for further details.|
If you're an existing customer of Regional Australia Bank, you may be entitled to the following assistance:
Southern Cross Credit Union (SCCU)
|The SCCU are offering a "Back to Business Loan" in line with the scheme at a variable rate of 4.40% p.a. and a "Back to Business Overdraft" at a rate of 6.40%p.a.|
In addition to this, existing business loan customers can also access the following assistance is necessary:
|Speedy Finance are also offering loans under the Coronavirus SME Guarantee Scheme. All industries are considered for loans, and loans start from $20,000 with an interest rate from 18% p.a. Loan terms range from 18 months to 3 years. Applicants for loans under the scheme must meet the following eligibility criteria:||More info|
|Spotcap are offering loans in line with the Coronavirus SME Guarantee Scheme in line with its underwriting criteria. Prospective borrowers should contact Spotcap for further details.||More info|
|St.George Bank has also announced that it will be participating in the scheme and loans are available effective as of 23 March 2020.|
Additional support measures for businesses from St.George Bank include:
|Suncorp also announced that it will be taking part in the scheme, but is still finalising the details of its loans.|
Other measures employed by Suncorp to help small business customers include:
|Business loans under the Coronavirus SME Guarantee Scheme are available up to $250,000 to existing customers only.|
|Westpac announced its new business loans under the SME Guarantee Scheme on 22 March 2020. These loans will be offered at a 4% p.a. lower rate than Westpac's current unsecured business loan.|
Westpac is also offering the following support to business loan customers:
We strive to keep this list as updated as possible. If you do not see your bank or lender listed, it is still advisable to contact them regarding the scheme. You can also consult the government treasury website for a list of approved lenders.
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