More small businesses are now eligible for loans of up to $5 million under an expanded federal scheme

More small businesses are now eligible for loans of up to $5 million under an expanded federal scheme
(Robin Utrecht, Echoes Wire, Barcroft Media via Getty Images)
  • Treasurer Josh Frydenberg has announced an expansion of the federal loan scheme that will make it easier for small businesses impacted by lockdowns to access government support.
  • The scheme will no longer require businesses to have received JobKeeper payments earlier in the year.
  • Businesses will have access to loans of up to $5 million, and allow for a repayment holiday of up to two years.
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An expanded federal scheme will allow businesses turning over less than $250 million to access loans of up to $5 million more easily.

Treasurer Josh Frydenberg on Wednesday announced small and medium sized companies would no longer be required to have received JobKeeper wage subsidies or have been affected by floods to access the program.

Under the expanded scheme, the government will guarantee up to 80% of the loans, which will be available through participating lenders until the end of the year.

It will also allow for repayment holidays of up to two years. 

Speaking to the Nine Network, Frydenberg said the loans will be used for a broad range of business purposes, including supporting investment and refinancing pre-existing debt, and has already delivered 70,000 loans worth $6 billion.

“We’re obviously seeking to give them the best possible interest rate, lower than what they otherwise may have found in the market,” Frydenberg said. 

“It would depend on the different lenders and the agreements that can be reached.”

The treasurer also acknowledged the change followed growing recognition that ongoing lockdowns, including a Greater Sydney lockdown heading into its third month, were putting business owners under extreme pressure. 

“Many people have their life savings on the line through their small businesses, and indeed in many cases their homes,” Frydenberg said. 

Frydenberg also told Sky News Australia that the government’s existing loan scheme had “already been very successful.”

Under the scheme currently in place, loans were only open to businesses, self-employed individuals and non-profits that received JobKeeper payments between January 4 and March 28 2021, or were operating in eligible Local Government Areas (LGAs) impacted by the floods in March 2021.

Now, Frydenberg said more businesses impacted by ongoing lockdowns would have access to federal support. 

“There had been a requirement that those recipients had been on JobKeeper during the March quarter – we’ve removed that requirement,” he said. 

Over 60% of the Australian population are currently under stay-at-home orders following an outbreak of the contagious Delta COVID-19 variant in June. 

In NSW, Victoria and the ACT, this has forced most businesses to conduct work from home and has reduced physical trade to only essential businesses such as supermarkets and chemists.

The Greater Sydney lockdown, which began in late June, has been extended to at least the end of September, and restrictions extended to all of NSW from August 14.

The ACT went into a seven-day lockdown on August 19, and a statewide lockdown for Victoria that began on August 21 is expected to last until midnight September 2.