Westpac has announced the expansion of its offer for its small-business customers impacted by the coronavirus pandemic and its associated lockdowns under the federal government’s Small-to-Medium Enterprise (SME) Recovery Loan Scheme.
In August, the federal government expanded the SME Recovery Loan Scheme to help SMEs dealing with the impacts of the coronavirus pandemic.
Under the original iteration of the scheme, the loans were only open to recipients of the JobKeeper payment between 4 January 2021 and 28 March 2021. This was then extended at the end of March to also cover SMEs impacted by the floods in some areas of NSW and the Queensland border earlier this year.
Under the expanded scheme, the government has removed both of these requirements for SMEs to be eligible under the scheme, given the ongoing COVID-19 crisis and associated lockdowns.
Under the scheme, loans are available from 1 April 2021 until 31 December 2021.
The amended scheme rules will come into effect on Friday (1 October).
As such, Westpac has announced that from Friday, new and existing small-business customers that meet the eligibility conditions under the scheme can access variable interest rates from 2.58 per cent to 4.28 per cent (depending on security offered and whether a repayment deferral applies).
Businesses can use the loans under the scheme to invest, buy commercial property, or to acquire another business, while eligible customers may be able to refinance existing business loans.
Westpac offers loan terms of three, five, and 10 years, options to defer repayments, and partially and fully secured options under the scheme.
To apply, a customer’s business must have an annual turnover of less than $250 million, be trading for more than 12 months and have a valid ABN, and be a tax resident of Australia (with the business based, registered and operating in Australia).
Businesses will be able to access loans of up to $5 million over a term of up to 10 years.
Commenting on the expansion of the scheme, Westpac chief executive consumer and business banking Chris de Bruin said: “Under the expanded Scheme more Australian businesses can now access the low-rate loans with the option of deferring repayments to give them time and breathing space to get back on their feet.
“The SME Recovery Loans will not only assist businesses feeling the impact of current lockdowns but will also help those preparing to reopen and grow.”
Mr de Bruin added that the major bank is encouraged by the latest vaccination rates and is expecting that the economy will rapidly shift to growth once lockdowns have ended.
“Australian businesses have had everything thrown at them in the last couple of years but have shown remarkable resilience,” Mr de Bruin said.
“We are committed to continuing to support them through this difficult time and are optimistic about the future.”
SME lender Judo Bank has announced that it will also be participating in the revamped SME Recovery Loan Scheme.
[Related: Westpac outlines risk culture fix]
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.