The New SME Recovery Loan Scheme now available 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. With the Government providing the banks with a guarantee of 80% of the Loan.

The banks will still assess the credit worthiness of applicants.

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 can still apply for this new extended Scheme.

The Loan Details

  • It can be up to $5 million in total 
  • It can be either secured or unsecured 
  • It can be 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 several 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.

How to apply for the Loan

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

Remember, this is not a grant or a handout. It is a Loan to be repaid. 

Why Apply for the Loan Scheme?

If your business is still under pressure, the new Scheme will provide targeted support and help close the funding gap, giving businesses more time to recover.


The Australian Banking Association provides some detail on participating banks: The Australian Banking Association – The Business Relief Package.