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SME COVID-19 loans top $40bn: ABA

Banks have approved $41 billion in loans for SMEs, while about 70 per cent of SME loan applications received the green light, ABA figures showed.

Shortly after reporting that repayments have resumed on almost half of all small-to-medium enterprises (SME) and home loans six months after the introduction of deferrals, the Australian Banking Association (ABA) has released new figures on the size of SME loans during the coronavirus pandemic.

A total of $41 billion has been approved by banks for SMEs and sole traders, which amounts to an average of $5 billion a month, $1.5 billion per week, or $215 million a day.

Meanwhile, approval rates for loans hovered around 70 per cent of loan applications received throughout the crisis, according to the ABA.

In the six weeks up to 7 October, banks had approved loans of more than $9 billion and lent funds to more than 128,000 SMEs and sole traders, with the average loan size being $320,000.


Total lending approved to all businesses of any size has equalled more than $200 billion since February.

On average, banks have approved more than 500 new loans a day for more than 250 days.

Commenting on the figures, ABA CEO Anna Bligh said a strong rate of lending by banks has been maintained despite the pandemic.

“The banks’ commitment to small business has been supported by a number of government and regulatory measures, including the RBA’s (Reserve Bank of Australia) term funding facility, changes to business lending rules, the instant asset write-off and the SME loan guarantee,” Ms Bligh said.

“These small businesses will drive Australia through the crisis and, after it has passed, employ millions of Australians as the economy rebuilds.”


Previous figures from the ABA revealed that as of about two weeks ago, two in five, or 45 per cent, of SME loans that had been deferred are now being repaid again, meaning that repayments had resumed on at least 82,000 loans.

This is down from more than 200,000 SME loans that had paused payments in late June.

According to data from the Australian Prudential Regulation Authority (APRA), as at 31 August, data submitted by all authorised deposit-taking institutions indicated that $229 billion worth of loans were temporarily granted repayment deferrals, representing 8.5 per cent of total loans outstanding.

Housing loans comprised the majority of total loans granted repayment deferrals, although SMEs have had a higher incidence of repayment deferrals, APRA said.

A total of 16.2 per cent of SME loans were subject to repayment deferral, with deferred loans totalling $53 billion out of $325 billion in total loans.

This compared with 9 per cent of housing loans, with deferred loans totalling $160 billion out of $1.8 trillion in total loans.

Exits from deferrals trounced new entries for the second straight month in August, with $24 billion loans expiring or exiting deferral and $14 billion of entries approved or extended.

[Related: Deferral expiry to push up non-performing loans: Moody’s]

SME COVID-19 loans top $40bn: ABA
SME COVID-19 loans top $40bn: ABA

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Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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