The government and the banks are combining to offer lending assistance during these troubled times.

SME Guarantee Scheme

The government will provide a guarantee of 50% of unsecured loans to SMEs with the following criteria:

  • Maximum loan of $250,000
  • Maximum term of 3 years
  • 6 months repayment holiday

These loans will be subject to the lender’s credit assessment criteria however the lenders are lending assistance by basing their assessment on the strength of the business whilst looking through the current downturn.

Relief from Responsible Lending Criteria

In order for small businesses to access credit quickly and efficiently, the government is providing a 6 month exemption from the standard ‘Responsible Lending Criteria’ which will reduce the administration burden on the lender and speed up the loan application process.

The exemption applies to credit for any business use including:

  • New credit
  • Increases to existing credit limits
  • Credit variations and restructures

Commercial Loan Repayment Relief

Small businesses with existing commercial loans may not be required make loan repayments for up to 6 months.

Each lender has different offerings, but the overall theme is that loans will be put on hold for up to 6 months with interest either put on hold or capitalised.

Lenders will issue further details in the coming week with implementation due in early April.

Residential Loan Repayment Relief

Home loans can be put on hold for up to 6 months provided the Coronavirus has significantly impacted the borrower’s financial situation.  Borrowers are required to apply directly with their lender to access the relief.

If you need advice on the tax changes, you can contact Noel May or Amanda Klye of May Klye & Associates on (03) 9585 7555 orenquiries@mktax.com.au.

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