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We have previously addressed in our blog series the actions the Reserve Bank of Australia (RBA) have taken to ensure businesses have access to cash more easily during these difficult times: RBA Incentives for Banks. Specifically they have slashed the cash rate to a record low of 0.25% and introduced a $90 billion Term Facility funding to banks.

Since then a Coronavirus SME guarantee scheme has commenced and our SME clients should see an immediate flow on effect from this. Under this scheme the government will guarantee 50% of new loans issued by eligible lenders to SME’s.

The Government will provide eligible lenders with a guarantee for loans with the following terms:

  • SMEs, including sole traders, with a turnover of up to $50 million.
  • Maximum total size of loans of $250,000 per borrower.
  • Loans will be up to three years, with an initial six-month repayment holiday.
  • Unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

SMEs interested in the Coronavirus SME Guarantee Scheme should approach their financial institution for more information. The Government is working with banks and other eligible lenders to ensure loans are available as soon as possible. While the scheme officially commences from April 2020, your bank or other lenders may be able to provide credit sooner, and still benefit from the guarantee.

To complement this, the Australian Banking Association has announced that Australian banks may defer loan repayments for small businesses affected by COVID-19 for six months.

Eligibility for this package is determined on a case by case basis and is dependent on the lender.

Various lenders, such as Commonwealth Bank and NAB, have already announced arrangements of loan deferral for various facilities, offering up to 6 months of loan deferral relief. For information on your individual circumstances, please contact your bank directly.


We will continue to update our community as the situation develops, including how your business may be supported. Our team is ready to assist your business understand, navigate and maximise the support available during these challenging times.


Date published: 17 April 2020

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