• Daniela Stevens

Small Business Loans Scheme closes 31 Dec 2021

Applications to participating lenders must be submitted and settled before 31/12/2021

If you are a small to medium business owner you might be looking at your current debt interest rate and wondering if there are better rates.


You may be ready to buy new equipment, or invest into your business, or even buy a commercial premise.

At times small business struggles to get access to cost effective lending especially if it is unsecured (meaning you are not providing an asset to back the money you are borrowing).

Many business owners are doing the credit card shuffle and a few small personal loans and trying to manage repayments and interest rates.

With the help of the federal government SME Recovery Loan Scheme you may be able to change your current debt and credit juggle.

If you need funds for the following :

  • Access to working capital

  • Capital Expenditures

  • Business Acquisitions (ie purchase of complimentary business)

  • Refinancing of eligible business lending (including credit cards is clearly business purpose)

  • Purchase non-residential real property (such as commercial property)

The SME Recovery Loan Scheme

Allows participating lenders to provide cheaper credit solutions to eligible applicants for both secured and unsecured lending.

Loan terms: are up to 10 years

Repayments: principal and interest, or interest only

Unsecured loans: up to $250,000

Secured loans: up to $5 mill per ABN

Interest rates, application fees, establishment fees and charges vary from lender to lender.

My research across some of the participating lenders revealed the following:

Unsecured loan interest rates between 2.49% and 5.45% pa

Secured loan interest rates between 1.99% and 3.45% pa

Application and establishment fees Nil to .95% of the loan amount

Monthly fees : nil to $30 per month

As with any lender it is not always about the interest rate, and sometimes due to your businesses tax returns and profits & loss, you may need to use a lender that will offer a higher lending limit.

There is the eternal trade-off, does the higher borrowing capacity outweigh the higher interest rate and other charges?

By taking on new debt to refinance other debt do you save on interest? or get lower monthly repayments as your business catches up again? Does the new debt allow you expand the business to increase profit.

The interest rates available via the scheme certainly can bring some costs savings into your business if you refinance wisely and manage the repayments, or allow you to grow the business.

Each lender has different ways to assess applications for the SME Recovery Scheme which may result in different lending limits. Take the time to review your options.


The rules have changed slightly. For many lenders you only need to provide a statement how your business has been Covid impacted, or an accountants letter. The requirements of how you document your business was impacted by Covid do vary across lenders.