FinLease - Does Your Business Know About SME Guarantees?
SME Guarantees (or the Small Medium Entity Guarantee Scheme) is part of the Federal Government’s stimulus package to support small to medium-size businesses (SME's).
This scheme is targeted at participating lending institutions with the aim to encourage lenders to continue lending to SME’s and support the flow of credit to business during COVID-19 Pandemic.
Under the current phase (Phase 2), the guarantee was extended for loans up to $1M with a 50% guarantee from the Federal Government.
This article is to alert buyers of pumps, equipment, & vehicles that the scheme is still open until 30/6/21 so make sure if you are applying for finance that your banker is taking this account when assessing your loan.
As per the Treasury website the scheme comprises of 2 phases:
provided SMEs with access to unsecured working capital loans of up to $250,000 for terms of up to three years to help them get through the impact of the Coronavirus. Phase 1 commenced on 23 March 2020 and ceased for new loans on 30 September 2020.
The Scheme has now been extended to support businesses in recovery and to enable continued support for SMEs facing the ongoing impacts of the Coronavirus.
1 October 2020 until 30 June 2021, eligible lenders are able to offer loans on the following enhanced terms:
• Loans can be used for a broader range of business purposes, including to support investment.
• Borrowers can access up to $1 million in total.
• Loans can be for terms of up to five years, and a repayment holiday is not required but can be offered at the discretion of the lender.
• Loans can be either unsecured or secured (excluding residential property).
Phase 2 will continue to support lenders’ ability to provide credit to SMEs, with the enhancements meeting the evolving needs of SMEs. To ensure SMEs benefit from low interest rates, rates will be capped at around 10 per cent per annum.
Loans will continue to be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.”
Michael Ryan, Senior Partner Equipment Finance
M 0417 279 891