Government extends small business loan guarantee scheme

Government extends small business loan guarantee scheme

As the economy transitions from the Federal Government’s wage subsidy, a number of economic support measures have been announced for businesses, including a $1.2 billion tourism package.

small business

The Federal Government has announced an expansion to its loan guarantee scheme for small and medium-sized enterprises, increasing the loan amounts and the eligibility criteria for businesses.

With the JobKeeper payment due to end in March, the Government has also announced a $1.2 billion tourism and aviation industry economic support package.

It’s expected more than 350,000 current recipients of JobKeeper will be eligible for the expanded small to medium enterprise (SME) Loan Guarantee Scheme.

To date there have been 35,000 loans made, valued at $3 billion. The scheme has $40 billion allocated.

Under the revised scheme, changes include:

  • an increased Government guarantee from the current 50/50 split between the Government and the financial lenders to an 80/20 split
  • an increase to the size of eligible loans, from $1 million to $5 million
  • an increase to eligible turnover from $50 million to $250 million
  • increased maximum loan terms from 5 to 10 years
  • allowing lenders to offer borrowers a repayment holiday of up to 24 months
  • allowing eligible businesses to refinance their existing loans.

Loans will be available from 1 April 2021 and must be approved prior to 31 December 2021.

$1.2 billion tourism and aviation package

The Government says its tourism package is designed to support businesses, workers and regions recover from the COVID-19 economic down-turn.

The package sponsors 800,000 half-price airfares to 13 key tourism regions, including the Gold Coast, Cairns, the Whitsundays and Mackay region, the Sunshine Coast, Lasseter and Alice Springs, Launceston, Devonport and Burnie, Broome, Avalon, Merimbula, and Kangaroo Island.

Other financial support will target:

  • international passenger airlines to maintain more than 8,000 core international aviation jobs
  • regular passenger airports to meet their domestic security screening costs
  • ground-handling companies to meet the costs of mandatory training, certification and accreditation to ensure they maintain their workforces
  • the reinstatement of domestic aviation security screening cost rebates for more than 50 regular passenger airports.

Additional measures announced

Other programs to be extended by the Federal Government include the:

  • Domestic Aviation Network Support (DANS) and Regional Aviation Network Support (RANS) programs
  • 50 percent waiver of domestic air services charges for Regular Public Transport (RPT) and aeromedical flights
  • International Freight Assistance Mechanism
  • $50 million Business Events Grants Program by three months to support Australian businesses to hold multi-day business events, covering up to 50 percent of costs incurred in participating business events during the 2021 calendar year
  • $94.6 million Zoos and Aquarium program by six months to support zoos, aquariums and wildlife parks to maintain their animal populations where their tourism revenue has been affected
  • the COVID-19 Consumer Travel Support Program will also be extended for three months beyond 13 March.

This article was first published to KPMG Tax Now.

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