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Government-backed business loans

Find out what government-backed loans are available for your business during the COVID-19 pandemic.

Bria Horne
Bria Horne

Updated

Fact checked

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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 government-backed business loan scheme 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.

What's in this guide?

  1. What is a government-backed business loan?
  2. Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme
  3. How do I qualify?
  4. Which banks are offering government-backed business loans?

Businesswoman wearing mask in the office during COVID-19 pandemic.

  • Coronavirus SME Guarantee Scheme update: Good news for businesses – the Australian Government has introduced a second phase of the Coronavirus SME Guarantee Scheme. This second phase will see broader eligibility criteria, as well as loan terms and loan amounts being increased. While the current phase of the scheme is set to end on 30 September 2020, the second phase will be initiated from 1 October 2020 until 30 June 2021.

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.

Loans under the scheme are available to SMEs, sole-traders and not-for-profits with an annual turnover of less than $50 million.

Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme

There are now two phases to the Coronavirus SME Guarantee Scheme:

1. First phase

Features of the loans under the first phase of the scheme include:

  • Available from: 22 March 2020
  • Available to: 30 September 2020
  • Max loan amount: Up to $250,000
  • Loan type: Unsecured
  • Loan term: Up to three years
  • Repayments: No repayments required for six months
  • Interest charges: Businesses will only be charged interest on the amount that they draw down – no interest will be charged on unused funds
  • Fees: There are no establishment or monthly fees

2. Second phase

Loans in the second phase of the scheme will be available to business under the same terms as the initial scheme. However, there will be the following changes and enhancements made:

  • Available from: 1 October 2020
  • Available to: 30 June 2021
  • Max loan amount: $1 million
  • Loan type: Can be secured (by commercial or residential property) or unsecured
  • Loan term: Up to five years
  • Repayments: Whether there is a six-month repayment holiday will be at the discretion of the lender
  • Interest charges: Businesses will only be charged interest on the amount that they draw down – no interest will be charged on unused funds
  • Fees: There are no establishment or monthly fees

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 and lenders are offering government-backed loans, as well as other forms of financial assistance, to support small businesses affected by COVID-19. Please note that details of these lenders and loans pertain to the first phase of the Coronavirus SME Guarantee Scheme only.

  • Details of loans offered by lenders in regards to the second phase of the scheme are currently in the process of being updated.
Lender
Assistance
ANZ
ANZ has confirmed that it will be participating in the scheme and applications are now open. New business loan customers can apply for loans under the scheme in the form of:
  • A three-year business loan of up to $250,000, with a six-month deferral on repayments (with interest capitalised).
  • A six-month business overdraft of up to $250,000, with a six-month deferral of interest. After the six months, borrowers will have the option of fully repaying the overdraft or rolling the balance into a term loan for up to 2.5 years.

Other ANZ COVID-19 support measures include:

  • 0.25% p.a. reduction in variable small business loan rates, effective from 27 March 2020.
  • 0.5% p.a. overall rate cut in March.
  • 0.8% p.a. drop (to 2.59%) for fixed two-year and three-year rates for secured business loans up to $1 million.
  • Six-month repayment deferrals, with interest capitalised.
  • Temporary increases in overdraft facilities for 12 months.
More info
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:

  • 0.35% p.a. interest rate reduction for business term loans and business overdrafts effective as of 3 April 2020.
  • Six-month loan repayment deferral.
  • The ability to switch your repayments to interest only for up to 12 months.
  • Waiver or deferral for a range of fees and charges.
More info
Bank of us
The Bank of us is offering Tasmanian businesses access to overdrafts of 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:

  • Six-month payment deferral on loan repayments, with interest capitalised.
  • The ability to convert your principal and interest loan to interest only.
  • For customers to continue to access their redraw balance fee-free.
Bankwest
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:

  • Six-month deferrals on scheduled loan repayments, including equipment finance loans.
  • Waiving merchant terminal rental and service fees for 90 days.
  • Waiving reductions in interest for early pre-payment of business term deposits.
  • Tailored restructuring options for loan customers.
  • Waiving establishment fees on overdraft products.
More info
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:

  • Six-month deferrals on business loan repayments, including equipment loans for eligible businesses.
  • Fee waivers for the restructuring of consolidation of loans.
  • Waiver of interest rate reduction for early-term deposit withdrawals.
  • Deferral of interest payments or term extensions.
  • Waiver or deferral for a range of fees and charges.
  • A reduction of 1% p.a. on residentially secured business loan variable rates.
  • A reduction of 0.75% p.a. on non-residential and unsecured business loan rates.
More info
Commonwealth Bank
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:

  • Six-month deferrals on business loan repayments, including equipment loans (this deferral will be automatic from April to June 2020, and if needed, businesses can opt in for an additional three months).
  • Three-month waiver of merchant and terminal fees.
  • Waiving of early redraw fees for business term deposits.
More info
GetCapital
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 six 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
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:
  • Maximum loan amount of $250,000 per borrower.
  • Minimum loan amount of $20,000.
  • Maximum loan term of three years.
  • Security not required.
  • No repayments for the initial six months of the loan term (interest will be capitalised to the loan).

Heritage also offers the following COVID-19 relief measures:

  • Reduce all business banking lending interest rates (except SMSF and credit cards) by 1.00% p.a. effective 1 April 2020.
  • Deferral of business loan repayments for up to six months, with interest capitalised.
  • Waiver of arrears fees and default fees for lending products for six months.
  • Early redemption in term deposits and farm management deposit accounts, without fees or penalties.
  • Additional working capital and loan restructures to be considered for business banking customers.
More info
IMB Bank
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
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 Financial
Liberty is offering business care loans from $25,000 to $250,000 (with repayments deferred for six months and interest capitalised) in line with the Coronavirus SME Guarantee Scheme.

It is also offering the following help to existing business customers:

  • Deferred scheduled loan repayments.
  • Restructured existing loans free of associated costs.
Lumi
Lumi is offering new and existing customers 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 six months.

The non-bank small business lender is also offering case-by-case assistance to existing customers affected by COVID-19.

More info
Macquarie Bank
Macquarie Bank has been approved to offer loans under the Coronavirus SME Guarantee Scheme.

Existing business customers for Macquarie Bank can also have access to:

  • A six-month repayment pause on any business loan up to $10 million, subject to eligibility criteria.
Moula
Moula is also participating in the scheme, with loans available now to new business customers.

Additional help to existing business customers from Moula includes:

  • Rearranging payments based on each individual customer's needs.
More info
MyState Bank
Under the scheme, MyState is 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 six-month repayment holiday, funds from approved loans can be drawn down in three instalments.

Additional support for existing business loan customers of MyState Bank include:

  • A reduction to commercial lending rates by 2.5%p.a.
  • Repayment deferrals on a variety of business loan products.
  • Early access to business term deposits without penalty.
NAB
NAB has also agreed to partake in the government's Coronavirus SME Guarantee Scheme. Business loans of 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:

  • Three-month deferral on business loan repayments.
  • Extending business loan terms.
  • Help with restructuring business and equipment loans.
  • A deferral on business credit card repayments.
  • Six-month waiver on terminal rental fees.
  • A reduction of 1% p.a. for variable small business loans (from 30 March 2020).
  • A reduction of 2% p.a. for new QuickBiz loans and all overdrafts (from 30 March 2020).
More info
OnDeck Capital
OnDeck Capital is offering new and existing customers business loans under the Coronavirus SME Guarantee Scheme. OnDeck's loans are customised as per each individual business's 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.

Queensland Country Bank
Queensland Country Bank is 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:

  • Deferred repayments on loans for up to six months.
  • One-off payments to cover the cost of any additional interest that may be charged while borrowers are not making loan repayments. This means you won't pay additional interest on the interest you accrue to your loan while repayments are paused. This does not apply to loans under the Coronavirus SME Guarantee Scheme.
  • From March 2020, the Over Limit Fee on credit cards and overdrafts/lines of credit will be waived for 3 months.
  • Loans can be placed on an interest-only basis for a period of time.
  • Loans can be restructured to reduce scheduled repayments.
  • Waiving establishment fees on new personal loan applications lodged for a set period of time.
  • Debt consolidation.
Regional Australia Bank
Regional Australia Bank is 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:

  • Up to six months deferred loan repayments.
  • Interest only repayment options.
Southern Cross Credit Union (SCCU)
The SCCU is 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 if necessary:

  • A pause on loan repayments for temporary relief.
  • The option to switch to interest only loan repayments for a period of time.
  • The ability to make repayments more manageable with the restructuring of existing loans and debt consolidation.
  • Fees waived on loan redraw and top-ups.
Speedy Finance
Speedy Finance is 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 three years. Applicants for loans under the scheme must meet the following eligibility criteria:
  • Minimum two-year ABN.
More info
Spotcap
Spotcap is offering loans in line with the Coronavirus SME Guarantee Scheme and its underwriting criteria. Prospective borrowers should contact Spotcap for further details.More info
St.George Bank
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:

  • 2% p.a. interest rate reduction on overdrafts for new and existing customers from 6 April 2020.
  • 1% p.a. interest rate reduction for small business cash-based loans, effective from 6 April 2020.
  • Six-month deferral on loan repayments for businesses with cash flow issues.
  • Merchant terminal fee refunds for up to three months.
  • No establishment fees for equipment finance loans until the end of June 2020.
  • Restructuring and consolidating loans.
  • Fee-free redraw facilities.
More info
Suncorp
Suncorp has also announced that it will be taking part in the scheme, but it is still finalising the details of its loans.

Other measures employed by Suncorp to help small business customers include:

  • Six-month deferral on loan repayments, with interest capitalised.
  • The option to change your repayments to interest-only for up to 12 months.
  • Reducing rates for new and existing variable secured business loans.
  • Fee waivers for various business deposit accounts.
  • Reducing line of credit and small business overdraft rates by 0.3% p.a.
Tyro Payments
Business loans under the Coronavirus SME Guarantee Scheme are available up to $250,000 to existing customers only.
Westpac
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 loans.

Westpac is also offering the following support to business loan customers:

  • 1.7% p.a. interest for 12 months on new business term deposits (up to $500,000 per customer).
  • Six-month deferral on loan repayments for eligible businesses.
  • Merchant terminal fee refunds for up to three months.
  • 2% p.a. interest rate reduction on overdrafts for new and existing customers, effective 6 April 2020.
  • 1% p.a. interest rate reduction for small business cash-based loans for new and existing customers, effective 6 April 2020.
More info

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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