The Morrison Government is set to establish the Coronavirus SME Guarantee Scheme. This measure will support small and medium enterprises (SMEs) to gain access to working capital and help them get through the Coronavirus situation.
Under the Scheme, the Federal Government will guarantee 50 percent of new loans issued by eligible lenders to SMEs.
The Federal Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs, with the Scheme able to support $40 billion of lending.
The Scheme will complement the Federal Government's recent commitment to cut red-tape in order to allow SMEs access to credit faster, as well as announcements made by Australian banks to support small businesses with their existing loans.
Additionally, the Coronavirus SME Guarantee Scheme builds on the investment made by the Federal Government to enable smaller lenders to continue supporting Australian consumers and small businesses, through providing the Australian Office of Financial Management (AOFM) an investment capacity of $15 billion to invest in wholesale funding markets used by small authorised deposit-taking institutions (ADI) and non-ADI lenders.
It further supports the Reserve Bank of Australia’s announcement of a $90 billion term funding facility, that will reduce the cost of lending, with particular incentives to lend to small and medium enterprises.
The measures the Federal Government is announcing today, along with the previous announcements, will deliver a total of $125 billion to support Australians get through the impact of the Coronavirus.
The Federal Government will guarantee up to $20 billion to support $40 billion in SME loans.
Business.gov.au: Supporting the flow of credit
If you have any questions, contact:
Industrial Relations
T: 03 9829 1123
E: ir@vacc.com.au