Coronavirus SME Guarantee Scheme

The Coronavirus SME Guarantee Scheme will provide small and medium sized business with timely access to working capital to help them get through the impact of the Coronavirus.

The Federal Government has launched the Coronavirus SME Guarantee Scheme to provide small and medium enterprises (SME) including self-employed individuals and not-for-profits, with access to additional funding to help support them through the pandemic. Regional Australia Bank is an approved participant in the Scheme, enabling us to further support businesses in regional Australia.

The Government has set eligibility criteria for the Scheme for small and medium businesses and not-for-profits (who hold an ABN) who:

  • Have annual turnover of less than $50 million;
  • Need support for current and upcoming cash flow needs (including working capital, liquidity and operating expenditure); and
  • Have not received a Government Scheme loan through another financial institution.

How does it work?

Under the Scheme, the Government will provide eligible lenders (like Regional Australia Bank) with a guarantee for loans with the following terms:

  • Maximum total size of loans of $250,000 per borrower.
  • Loans will be up to three years, with an initial six-month repayment holiday (interest capitalised).
  • Unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan, with the exception of a personal guarantee (unsupported).

 

Portrait Of Female Owner Of Independent Clothing And Gift Store With Digital Table

Regional Australia Bank is ready to take applications now

Applications for the Coronavirus SME Guarantee Scheme are closing on 30 September, 2020. To apply or discuss your eligibility, please contact our SME and Commercial Lending Team.

Your Coronavirus SME Guarantee Scheme questions answered

How will the Scheme help businesses facing cash flow difficulties?

Under the Scheme, the Government will support unsecured loans of up to $250,000 to small and medium sized businesses. The loans are intended to provide for businesses current and upcoming cash flow needs, including rent and staff expenses.

The loans will be available with a term of up to three years. A six-month repayment holiday will be available on all loans.

Am I eligible for the Scheme?

The Scheme is available to all active Australian businesses with turnover of less than $50 million in the previous financial year, or expected turnover of less than $50 million in the current financial year. Both self-employed individuals and non-profit businesses are eligible.

Access to the loans is ultimately a decision for participating lenders. Credit assessment processes will be undertaken, however lenders are expected to look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

How do I access the Scheme?

Loans backed by the Scheme will be made available via commercial lenders. The Government is not directly participating in the lending process. Businesses wishing to apply should contact the Regional Australia Bank SME and Commercial Lending Team. You can also view a list of other financial institutions participating in the Scheme.

I am a not-for-profit. Am I eligible for the Scheme and how do I access it?

Not-for-profits are eligible for the Scheme, provided they have turnover of less than $50 million and have an ABN. As is the case for other businesses, non-profit bodies will be eligible for loans of up to $250,000 via commercial lenders participating in the Scheme.

Non-profit bodies seeking to apply for the Scheme should speak to Regional Australia Bank’s SME and Commercial Lending Team.

My business has been affected by Coronavirus but I do not want to take out a loan. Am I eligible for other assistance?

The Australian Government is supporting Australian businesses to manage cash flow challenges and retain employees. Assistance includes cash flow support to business and temporary measures to provide relief for financially distressed businesses. Visit the Australian Government website to find out more.

What are the interest rates of the loans

Interest rates will be determined commercially by lenders. Businesses are encouraged investigate options before committing to a loan under the Scheme.

What happens if I cannot repay the loan?

Borrowers are fully responsible for repaying the loans made under the Scheme. If the borrower is unable to meet repayments, lenders will follow usual default processes.

What type of loans are available?

Loans must be used for business purposes only, and must be used to support current and upcoming cash flow needs (for example, rent and staff expenses).

The loans will be unsecured, meaning that businesses will not need to provide an asset as security. A range of loan types may be made available, including overdrafts and term loans. Credit card facilities (including charge cards) are not eligible under the Scheme.

In particular, the Government encourages lenders to provide facilities that only have to be drawn if needed by the SME, such as overdrafts. This will mean that the SME would only incur interest on the amount they draw down. If they do not draw down any funds from the facility, no interest will be charged, but they will retain the flexibility to draw down funds should the need arise.

When can I access the Scheme?

Regional Australia Bank is accepting applications now, with applications closing on 30 September, 2020.

Which lenders are offering loans under the Scheme?

The following lenders have finalised the necessary documentation to participate in the Scheme.

Disclaimer
Terms, conditions, fees, charges and lending criteria apply. Please refer to the Product Details when considering if any product is right for you. Regional Australia Bank Ltd is the issuer of these products. This offer is only available to approved business customers and for business purposes only. This offer cannot be used to refinance existing debt or purchase an asset.