Westpac has announced that it will accept applications for new and existing eligible customers for equipment and finance goods loans, under the second part of the federal government’s Coronavirus Small and Medium Enterprises (SME) Guarantee Loan Scheme.
For the equipment and finance goods loans, Westpac said it is offering eligible SMEs (those with up to $50 million in annual turnover) equipment loans starting from 2.99 per cent (fixed for five years) on loans up to $1 million (subject to the borrower’s aggregate loans across all financiers under the scheme not exceeding $1 million).
This could be used in conjunction with the federal government’s enhanced instant asset write-off and immediate full expensing measure.
Westpac said that it will also waive the equipment finance establishment fee (usually from $450) on equipment finance goods loan applications submitted under Westpac’s SME guarantee offer, and settled between 1 November 2020 and close of business 31 December 2020.
Chief executive, business division, Guil Lima said the loan is designed to help SMEs upgrade technology and essential equipment, along with other business assets.
“We know many businesses put off upgrading equipment and technology due to cost. Our research revealed 58 per cent of small and medium-sized businesses are holding off making large purchases as a result of COVID-19 uncertainty,” Mr Lima said.
“This new loan, together with the federal government’s instant asset write-off scheme and immediate full expensing measure, will help eligible businesses make the essential improvements they need to grow and move with the times.”
Assisting businesses with reinvesting in their companies by purchasing new equipment could make them more competitive and sustainable while increasing workplace productivity, Mr Lima suggested.
“From a macroeconomic perspective, these initiatives will help encourage business spending in the economy, supporting the economic recovery underway across most of Australia. Importantly, spurring business investment helps create jobs, an important national priority,” he said.
The latest announcement follows the major bank’s release of other offerings under the scheme.
According to Westpac’s SME COVID-19 Response Report, which was compiled based on a survey of 604 SMEs in September, 80 per cent of SMEs have either cut their spending, postponed making large purchases, or held off borrowing as a result of economic uncertainty.
Under the second phase of the government’s scheme, which commenced on 1 October, the maximum loan size has increased from $250,000 per borrower to $1 million per borrower, allowing secured products and increasing from the previous three-year limit to five years.
According to Treasury figures, as of 25 September, the scheme, which is worth $40 billion in total, has supported just 20,611 loans worth $1.9 billion under phase one of the scheme.
[Related: Moneytech joins SME Guarantee Scheme panel]
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.