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$5 million: Banks and Govt extend helping hand to small business

·3-min read
Logos of the big four banks and Australian money.
The big banks have welcomed the Government expansion of the SME loan scheme (Source: Getty)

The big banks have welcomed news the Government is expanding the SME Recovery Loan Scheme (SMERLS).

The expansion of funding through SMERLS means that any business with annual turnover of less than $250 million which has been impacted by the COVID-19 pandemic is eligible to borrow up to $5 million for up to 10 years at record low rates.

Borrowers can also benefit from repayment holidays on eligible products.

The support for small and medium sized businesses includes:

  • Repayment deferrals on business loans;

  • A refund of merchant terminal fees for up to 90 days for customers;

  • A waiving of fees and notice periods on Cash Deposit and Farm Management Deposit accounts;

  • CBA loans provided through the Federal Government-backed SME Loan Recovery Scheme

  • This offers eligible businesses loans up to $5 million with variable interest rates from as low as 2.6 per cent a year for secured loans, and from 2.85 per cent per year for secured loans with a repayment holiday from 12 months.

  • Unsecured loans are available with rates from 3.25 per cent a year, and from 3.75 per cent a year with a repayment holiday from 12 months;

  • Access to a range of tailored grants and benefits specific for businesses;

  • An easy-to-use Financial Support Guide to help businesses, community groups and individuals understand the options available and range of initiatives already announced by government and Commonwealth Bank;

  • Free counselling services; and

  • Free mental health webinars facilitated by Smiling Mind.

Commonwealth Bank (CBA) executive of business banking Mike Vacy-Lyle said the impacts of the pandemic have been widespread and diverse across businesses and industry sectors.

“Many require access to credit to help them through this period, and the expansion of SMERLS is an excellent initiative to ensure that more businesses will be able to access business lending at low rates and on flexible terms,” he said.

“At CBA we are firmly committed to supporting the SME sector, which is so vital to Australia’s economic recovery.”

Vacy-Lyle said over the past month CBA have spoken with more than a million small to medium sized business customers.

“[CBA has alerted] them to the support we have available such as fee refunds or waivers, repayment deferrals, and bridging finance,” he said.

“Customers are telling us their key concerns continue to be about cash flow management, managing suppliers, and keeping staff employed.”

NAB executive for business & private bank Andrew Irvine said many small businesses across Australia are continuing to do it tough due the impact of extended lockdowns and border closures.

“The SME Recovery Loans are a good option for businesses who need additional capital at this time and expanding the eligibility criteria is a positive step,” Irvine said.

“We have thousands of bankers around the country ready to help our customers get through this. Our bankers will work with customers to understand their situation and what we can do to support them.

“We encourage everyone out there to get behind their local small businesses. There’s no better time to buy local.”

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