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3.5 million Aussie businesses thrown $1 million lifeline

Jessica Yun
·2-min read
(Source: Getty)
Small- and medium-sized businesses will be granted loans of up to $1 million under the scheme extension. (Source: Getty)

The government will offer small and medium-sized businesses struggling to recover from the economic crisis part-guaranteed loans of up to $1 million.

Ahead of the government’s Thursday economic update, the government will offer the loans as an extension of the $40 billion SME Guarantee Scheme which was first announced in the government’s second $66 billion stimulus package, the AFR reported.

A number of measures, including JobSeeker and JobKeeper, are expected to be extended and revamped in Treasurer Josh Frydenberg’s mini-budget announcement.

The original scheme allowed for small businesses to borrow $250,00 unsecured with the government as a guarantor, with repayments not required for six months.

The scheme originally allowed for three year loans, but the new scheme will be extended to five years in Thursday’s update and will begin on 1 October this year and will be made available until 30 June 2021.

While $20 billion had been committed to the scheme announced in the second stimulus, only 15,600 business loans worth $1.5 billion have been issued.

The Thursday economic update will also contain changes to JobKeeper that will see it become a tiered payment, rather than a flat payment.

The eligibility test for the wage subsidy will also be tightened, according to the treasurer.

"If that turnover is approved sufficiently and they are opening their doors, seeing more foot traffic through their shops, then the JobKeeper program may not be applicable to them," said Frydenberg.

More than 100,000 Australians were kicked off JobKeeper today as childcare workers are cut from the scheme.

New analysis from the Australia Institute also found that 650,000 Australians – including children – will face poverty when the JobSeeker boost ends in September.

But the government has given Australians hope that the JobSeeker base rate may be lifted.

“Once we get to the end of September, it will be a matter of making sure that any ongoing support is appropriately targeted to those businesses who genuinely need it,” Finance Minister Mathias Cormann told Sky News.

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