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SME Recovery Loan Scheme


The Government’s SME Recovery Loan Scheme (the Scheme) is designed to support the economic recovery and provide continued assistance to SMEs dealing with the economic impacts of the coronavirus crisis.

In recognition of the continued economic impacts of the Coronavirus Pandemic, the Government announced on 13 December 2021 that it was amending the Scheme Rules to expand the SME Recovery Loan Scheme (under varied terms) to provide support to SMEs adversely economically affected by the Coronavirus Pandemic. The Amended Scheme Rules were published on 15 December 2021 and came into effect on the 2022 Scheme Expansion Date (1 January 2022).

The Scheme is enhancing lenders’ abilities to provide cheaper credit to otherwise viable SMEs for additional funding to get through the Coronavirus crisis, recover and invest for the future. The Government will work with lenders to ensure eligible SMEs have access to finance to maintain and grow their businesses.

The SME Recovery Loan Scheme builds on earlier loan schemes introduced during COVID-19.

Under the existing SME Recovery Loan Scheme, loans are available from 1 April 2021 until 31 December 2021 with a Government guarantee of 80 per cent. Under the 2022 Scheme expansion, loans are available from 1 January 2022 until 30 June 2022, with a Government guarantee of 50 per cent.

A summary fact sheet [PDF 200KB | DOCX 177KB] is available.

Guarantee of Lending to Small and Medium Enterprises (Coronavirus Economic Response Package) Act 2020

Legislative Rules

Treasurer’s Delegation [PDF 1.73MB]

Scheme Rules - Amended Scheme Rules came into effect (in conjunction with the Scheme Guarantee Amending Deed) on 1 October 2021 – further amended Scheme Rules [PDF 1.6MB | DOCX 164KB] came into effect (in conjunction with the Scheme Guarantee Amending Deed) on 1 January 2022.

Deed of Guarantee - the Scheme Guarantee Amending Deed came into effect (in conjunction with the amended Scheme Rules) on 1 October 2021 – further Scheme Guarantee Amending Deed came into effect (in conjunction with the further amended Scheme Rules) on 1 January 2022.

SME Recovery Loan Scheme - Reporting Standard

ARS 920.6: Financial Sector (collection of data) (reporting standard) determination No. 42 of 2021

ARS 920.8 Australian Government Small and Medium Enterprise (SME) Recovery Loan Scheme – Flood

ARS 920.10 Australian Government Small and Medium Enterprise (SME) Recovery Loan Scheme

SME Recovery Loan Scheme - Lender Guide [PDF 210 KB]

The scheme is open to small and medium sized businesses with up to $250 million turnover, including self‑employed and non‑profits. So far, the Scheme has been open to eligible SMEs that were:

  • the recipient of a JobKeeper payment between 4 January 2021 and 28 March 2021.
    Note: a JobKeeper Scheme‑Backed Loan can only be approved under this eligibility prior to the Scheme Expansion date (1 October 2021);
  • affected by the floods in eligible Local Government Areas in March 2021; Note: a Flood affected loan can only be approved under this eligibility prior to 1 January 2022; or
  • adversely economically affected by COVID‑19. Note: a Covid Scheme‑Backed Loan can be approved under this eligibility from the Scheme Expansion Date (1 October 2021).

Participating lenders are offering guaranteed loans on the following terms under the SME Recovery Loan Scheme (2022 Scheme expansion):

  • the Government guarantee will be 50% of the loan amount
  • the expanded Scheme will not be available for loans to flood affected SMEs that are not adversely economically affected by COVID‑19
  • the expanded Scheme will commence on 1 January 2022 and end on 30 June 2022.
  • lenders are allowed to offer borrowers a repayment holiday of up to 24 months
  • loans can be used for a broad range of business purposes, including investment support
  • loans may be used to refinance any pre‑existing debt of an eligible borrower, including those from the SME Guarantee Scheme
  • borrowers can access up to $5 million in total, in addition to the Phase 1 and Phase 2 loan limits
  • loans are for terms of up to 10 years, with an optional repayment holiday period
  • loans can be either unsecured or secured (excluding residential property)
  • the interest rate on loans will be determined by lenders, but will be capped at around 7.5 per cent, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time

Lenders can offer any suitable product to the borrower except credit cards, charge cards, debit cards or business cards. Loans issued under the Scheme may take any other form of credit providing eligibility criteria are met.

Loans issued under the Scheme can be used to refinance existing loans or for a broad range of businesses purposes (including to support investment) but cannot be used to: 

  • purchase residential property
  • purchase financial products
  • lend to an associated entity, or
  • lease, rent, hire or hire purchase existing assets that are more than half-way into their effective life.

Loans may be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme. There will be some restrictions on refinancing loans, such as: not allowing loans more than 30 days in arrears to be refinanced; or borrowers who have entered external administration, or are insolvent, to refinance debts. Lenders can vary or restructure loans when they continue to meet eligibility criteria (including the maximum loan term) and do not increase the loan limit after approval.

Lenders must disclose the effective interest rate (whether variable or fixed) to the borrower at the loan agreement date. For variable rate loans, the lender must disclose the relevant margin and underlying base rate where applicable.

Loans can be used to purchase non-residential real property (such as commercial property) or for the acquisition of another business.

Lenders will be able to rely on a declaration from the borrower regarding the purpose of the loan. 

Eligible SMEs with operations in areas impacted by the floods in March 2021 may apply for a loan under the SME Recovery Loan Scheme until 31 December 2021.

The following is a list of eligible Local Government Areas (LGAs) impacted by the floods as declared per the Australian Disaster Recovery Payment as at 31 March 2021: 

Bega Valley
Blue Mountains
Canterbury Bankstown
Central Coast
Clarence Valley
Coffs Harbour
Glen Innes Severn
Inner West
Lake Macquarie
Liverpool Plains
Moree Plains
Nambucca Valley
Northern Beaches
Port Macquarie-Hastings
Port Stephens
Richmond Valley
The Hills

Loans backed by the Scheme will be available through participating commercial lenders. The decisions to extend credit, and management of the loan, remain with the lender. 

Borrowers can access credit under the Scheme through approved participating lenders.

For more information on how to apply, visit Information for SMEs.

Loans under the 2022 scheme expansion are available from 1 January 2022 until 30 June 2022.

The Government is currently considering applications from lenders interested in participating in the SME Recovery Loan Scheme.

The following lenders have been approved to participate in the SME Recovery Loan Scheme.

  • ANZ
  • Bank of Queensland
  • Commonwealth Bank of Australia
    • Bankwest
  • Earlypay
  • Fifo Capital Australia
  • Judo Bank
  • Liberty Finance
  • Marketlend
  • Moneytech Finance
  • National Australia Bank
  • Regional Australia Bank
  • Shift (formerly Get Capital)
  • Social Enterprise Finance Australia
  • Suncorp-Metway
  • The Mutual Bank
  • TrailBlazer Finance
  • Unity Bank
  • Westpac
    • BankSA
    • Bank of Melbourne
    • St George