The Morrison Government is today making the first round of offers to banks and non-bank lenders to participate in the Coronavirus SME Guarantee Scheme to support small and medium sized businesses (SMEs) get access to working capital to help them get through the impact of the coronavirus.
Under the Scheme, the Government will support up to $40 billion of lending to SMEs with turnover of less than $50 million, including sole traders and not-for-profit organisations, with the Government guaranteeing 50 per cent of new loans issued by eligible lenders until 30 September 2020.
The Government will make offers to 29 banks and 5 non-bank lenders in response to expressions of interest which will total $34 billion of potential lending to SMEs. Applications from a range of other lenders are currently being assessed for the remaining $6 billion in the Scheme.
The legislative and scheme rules have also been finalised following consultation with lenders and key stakeholders to ensure the Scheme provides the required support to SMEs during this period.
The Scheme complements other initiatives undertaken by the Government and the Reserve Bank of Australia (RBA) to support lending to SMEs, including:
- $15 billion to allow AOFM to invest in wholesale funding markets used by small ADIs and non-ADI lenders.
- The RBA’s $90 billion term funding facility for ADIs with a priority for SME lending.
- Cutting red tape to ensure SMEs get access to credit faster.
The Scheme will also support the JobKeeper program to help businesses get access to the necessary working capital to continue operating when their revenues have been significantly impacted by the coronavirus.
Further information about the SME Guarantee Scheme can be found on the Treasury website. A list of participating lenders will be available on the Treasury website once the offers to lenders have been accepted.
The Government will continue to help small businesses build a bridge to the other side to ensure that Australia bounces back even stronger.