The Commonwealth Treasury has approved the first participating lenders in Phase 2 of the Government’s SME Guarantee Scheme.
Key information on Phase 2 of Government Guarantee Scheme
Loans under the Scheme can be issued from 1 October 2020 until 30 June 2021
$1 million is the max limit available under Phase 2
A borrower can take out multiple guaranteed loans with either the same lender or multiple lenders, provided that the total amount does not exceed $1 million
The interest rate on loans will be determined by lenders, but will be capped at around 10% per annum.
Lenders may choose to offer a repayment holiday at any stage and for any duration during the life of the loan (provided that all other requirements of the Scheme are still met).
Both unsecured and secured lending will be permitted under the Scheme Phase 2
Loans issued in Phase 2 can be used for a broad range of businesses purposes (including to support investment) but cannot be used to:
-Purchase of residential property;
-Purchase of financial products;
-Lending to an associated entity; or
-Lease, rent, hire, hire-purchase existing assets that are more than half way into their effective life.
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Obtaining development finance in today’s credit market is not for the uninitiated. Lending staff at a local branch may say yes initially due to their