SME Recovery Loan

SME Recovery Loan Scheme

Written by: Institute of Certified Bookkeepers

The New SME Recovery Loan Scheme will Begin as of 1st April 2021 through to 31st December 2021.
With the first federal government’s SME Loan Guarantee Scheme helping over 35,000 expanding the scheme aims to support more businesses affected by the pandemic and boost the economy. The government will now accept a higher responsibility of the guarantee, moving from a 50/50 backing with banks to the Government providing the banks with guarantee 80% of the loan. The banks will still assess the credit worthiness of applicants.

Understanding the Eligibility Criteria
A business is eligible for the SME Recovery Loan Scheme if it meets the following conditions:

■ Receive a JobKeeper payment between 4th January 2021 and 28th March 2021.
■ Have up to $250 million turnover.

The scheme is also open to self-employed individuals and non-profit organisations. If your business has previously accessed a loan under the SME Guarantee Schemes you are still eligible to apply for this new extended scheme.

What are The Loan Details?
The loans are up to $5 million in total and can be either secured or unsecured, and for a repayment period of up to 10 years. Lenders are also able to offer a repayment holiday period of up to 24 months. The interest rate offered is determined by each lender and will generally be capped at 7.5%.

If eligible, your business can use the loan for a number of purposes including:
■ To refinance existing debt.
■ Purchase residential or commercial property.
■ Lend to another associated entity of the business.
■ Invest in assets, technology, or equipment.

Applying for the Loan
Loans backed by the Scheme will be available through participating commercial lenders. The decision on whether to extend credit, and management of the loan, will remain with the lender.

The process is as follows:
1. Approach a lender
Loans backed by the Scheme will be available through participating commercial lenders. The Government is not directly participating in the lending process.
2. Lender makes a decision
The decision on whether to extend credit, and management of the loan, will remain with the lender.
3. If a lender declines your application or you are not satisfied with the product on offer, you can approach
other lenders.
Businesses are encouraged to shop around and compare products offered by different participating lenders.

Be mindful the SME Guarantee is not a grant or a handout. It is a loan, and the banks expect it to be repaid.

Why Apply for the Loan Scheme?
Some sectors still remain under pressure. For those businesses, the new scheme will provide targeted support and will also help to close the funding gap, giving businesses more time to recover. Participating banks are also offering loans, including overdrafts, at very low interest rates, to help bridge cash flow gaps. The Australian Banking Association provides some detail on participating banks: The Australian Banking Association– The Business Relief Package 

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Accountability BAS and Bookkeeping Services provide professional bookkeeping and BAS services to businesses in most Australian states.

What our clients say about us…

“I had the pleasure of being introduced to ABBS through Jo Bacon the WA representative. The professional service.  I have received has been so essential in assisting me with my new business, I am so grateful for the expertise, professionalism and excellent customer service I have experienced.” Marion B

“Thanks to Steve Cocks from ABBS we managed to get all the books up to date and in no time, … and that took the weight off my shoulders so I could focus on developing my business and moving forward in a more organized and structured way, keeping on top of things every month which makes life much easier.”  Elisabeth G

“As an ex-bookkeeper, I’m pretty fussy about how I like things done and I’ve found Caran from ABBS to be a pleasure to work with. She’s competent and efficient and now that I have her helping me with the bookkeeping for my business, I wouldn’t be without her.”  Sandy T

    “As a sole director of a regional law firm,  I’m very conscious of the need to have the proper business support, particularly in the areas of bookkeeping and trust accounting. Since I outsourced those components of my business to ABBS, I feel as if these vital components of my business are in expert hands and I can relax knowing that it is all being done properly , efficiently and legally.  Rob’s expertise with running a business including his insight with managing employees, his ready availability for a discussion at any time on any business matter, his advice and support, have been absolutely invaluable to CastleGate Law.  In addition, Janice from ABBS looks after my trust accounting through Leap with equal efficiency and expertise – she and Rob make a great team for any law firm.  Not only do I feel like I’m sharing the considerable burden of running a law firm, but I feel like in Rob I have someone on my side as a business owner, because of his implicit understanding of business matters, his encouragement and support. For all these reasons I cannot recommend ABBS highly enough as additions to any law firm or business partner. ”  Kate R

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To be able to provide you with a relatively accurate quote, we will need you to provide some core information that is used for this purpose only.

We suggest you have the bank statements or closely estimate the number of transactions on all business bank accounts and credit cards for the last three months.

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