Finance & Loans

~|elegant-themes~|elegant-themes-icon~|

April 15, 2020

Traverse_Finance-and-Loans

Coronavirus SME Government Loan Guarantee – $250,000

The Coronavirus Small and Medium Enterprise (SME) Guarantee Scheme is a coordinated action between the Australian lenders and Federal Government to support the flow of credit in the Australian economy by supporting the small and medium-sized business with an unsecured loan up to $250,000 for a business who is impacted by COVID-19.

Key information
  • The maximum amount is $250,000 with 50% guaranteed by the Australian Government;
  • No establishment or account fees;
  • Interest rate dependent upon customer risk-grade – refer to the specific lender; and
  • The term is three years – first 6-month repayment deferred and interest capitalised. 
Eligibility
  • Loans must be used to support current, and upcoming business cash flow needs only, including working capital, liquidity and operating expenditure and cannot be used to refinance drawn facilities.
  • Meets the small and medium business turnover test with less than $50M in gross revenue;
  • The government expects lenders to follow their USUAL credit assessment process, and to look through the cycle to sensibly take into account the uncertainty of the current economic conditions

Example

Bianca is a childcare operator with a historical annual turnover of $2m a year with an average net profit after tax of $700K per annum. Her business is severely impacted by COVID-19 and expects a 50% drop in revenue for a year.  She worked with her Accountant and prepared an annual cash flow to assess her ability to repay the loan with a 50% drop in revenue for the first year.

*(Principal and interest repayment at 4.5% over 2.5 years loan term)

Stay tuned for more detailed information on the COVID-19 stimulus in the coming weeks.

Want to know more? Get in touch with one of the team for a comprehensive overview of what you’re entitled to. 

Related Articles

JobKeeper 2.0

JobKeeper 2.0

The first round of JobKeeper ended on 27 September 2020. The Government has decided the scheme will continue for an additional 6 months until 28 March 2021. Key changes: More employees are eligible for JobKeeperThe eligibility rules will be revisedThe payment rates...

Superannuation Contributions

Superannuation Contributions

Deducting your Superannuation Contributions  Pay by COB Tomorrow to Ensure your Deductions for 2020 EOFY!!! June 30 is only next week!!! A friendly reminder that if you are wanting to ensure your contributions for you personally, or through your business on behalf of...

JobKeeper Program | Enrolments extension

JobKeeper Program | Enrolments extension

JobKeeper Update ATO Grants extension to enrol and pay Employees for the first two fortnights The ATO has now announced an extension of time to 31 May for employers who wish to enrol for the first two JobKeeper fortnights. In addition,employers will have until 8...