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SME Guarantee Scheme

The Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme will support up to $40 billion of lending to SMEs. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The Scheme will enhance lenders’ willingness and ability to provide credit, supporting many otherwise viable SMEs to access vital additional funding to get through the impact of Coronavirus. The government guarantee loan scheme is to a maximum of $250,000, it is unsecured, no additional security is required, it has a maximum term of 3 years (fully amortising after 6 months, over residual 2 and half year term). Whilst credit criteria is yet to be released, certain questions will need to be asked to fully understand the customer’s position and whether they qualify for one of these facilities. A list of questions that may be asked:
  • How has cash flow been impacted?
  • What actions are being taken to preserve cash flow?
  • Is there opportunity to diversify? If so what is the impact?
  • Is there reliance on another industry to supply goods and services? How is this impacting the customer and are alternatives available?
  • Does the request make sense given current environment and customers risk category?
  • Were accounts in good standing prior to 1 January 2020?
  • Did the customer have a clear credit bureau prior to 1 January 2020?
  • All statutory payments were up to date prior to 1 January 2020?
  • Customer has not accessed more than $250k of additional funding for covid 19 assistance
  • Does the amount requested not exceed total business expenses for the 6 month period to December 2019, BAS statement required to validate
The Scheme will be available for new loans made by participating lenders from April 2020 until 30 September 2020. If you would like to know if you are eligible for this scheme, please contact one of our advisors today to discuss your situation.


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