Coronavirus (COVID-19) updates from the Australian Government

Information for SMEs


The Scheme is only open to firms with turnover of up to $250 million that either received JobKeeper payments in the March quarter of 2021 or have been affected by the floods eligible LGAs in March 2021.

Both self‑employed individuals and non-profit businesses are eligible. Businesses that have accessed loans in Phase 1 and Phase 2 can also apply for loans under the scheme.

Loans will be made available from 1 April 2021 until 31 December 2021.

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

  1. Approach a lender
    Loans backed by the Scheme will be available through participating commercial lenders. The Government is not directly participating in the lending process. 
  2. Lender makes a decision
    The decision on whether to extend credit, and management of the loan, will remain with the lender. 
  3. If a lender declines your application or you are not satisfied with the product on offer, you can approach other lenders
    Businesses are encouraged to shop around and compare products offered by different participating lenders. 

Lenders can offer any product suitable to the borrower, with the exception of credit cards, charge cards, debit cards or business cards. Loans issued under the Scheme may take any other form of credit, provided the Scheme’s 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 of residential property;
  • purchase of financial products;
  • lending to an associated entity; or
  • lease, rent, hire, hire-purchase existing assets that are more than half way into their effective life.

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 must disclose the effective loan interest rate to the borrower at the time of the loan agreement.

Fees will be determined by lenders but can only be charged to the extent they are consistent with fees on similar loans outside the Scheme. No fees are permitted to be applied to undrawn facilities.

  • Both unsecured and secured lending will be permitted under the Scheme.
  • Lenders are permitted to take guarantees.
  • For secured loans, lenders will be permitted to take any security except residential property.

The Treasurer has varied the authorisation conditions for the Australian Financial Complaints Authority (AFCA) Scheme to limit the matters that AFCA can consider in relation to certain decisions made by lenders under the Coronavirus SME Guarantee Scheme. These restrictions will continue to apply for loans issued under the SME Recovery Loans Scheme.

Under the AFCA Scheme Authorisation (Additional Condition) Amendment 2020, the AFCA Scheme Rules have been amended to limit AFCA’s ability to consider decisions made by the lender about whether to provide a loan (and the amount of the loan) under the Coronavirus SME Guarantee Scheme and ensure that when making assessments or determinations about a complaint, AFCA gives consideration to the impact of the Coronavirus on the economy and the intent and requirements of the Scheme.

The amendments to AFCA’s authorisation conditions also apply to decisions made by lenders (all lenders and not only those lenders that are participating lenders under the Scheme) to approve repayment deferrals for businesses in response to the coronavirus crisis. The amendments exclude from AFCA’s remit complaints in relation to decisions by lenders to offer repayment deferrals to businesses impacted by the coronavirus, and any consequential change to the amounts payable under the loan or the duration of the loan.

The changes to the AFCA Scheme Rules apply to complaints made from 25 April 2020.

Further information on these changes is available from AFCA.

Can I take out loans under both phases of the Scheme? 

Businesses that have accessed loans in Phase 1 and Phase 2 of the SME Guarantee Scheme can apply for additional loans of up to $5 million in the SME Recovery Loan Scheme. 

Can I apply for a loan as a recipient of JobKeeper and again as a flood-affected business? 

Yes, an eligible SME can apply for multiple loans as either a recipient of JobKeeper or a flood-affected business under the SME Recovery Loan Scheme, as long as the total of these loans does not exceed $5 million. 

My insurance covers the damage to my business from the storms and floods in March. Can I still apply for a loan under the SME Recovery Loan Scheme? 

Yes. Your entitlements under any commercial insurance contract does not affect your eligibility to apply for the SME Recovery Loan Scheme. 

Does interest still get charged during a repayment holiday?

Yes. If you are on a repayment holiday under a scheme loan, you will not have to make any repayments during the holiday period. However, interest will continue to accrue on the loan, which you will have to pay back once payments recommence at the end of the holiday period.

What if I cannot repay the loan?

Borrowers are fully responsible for repaying the loans made under the Scheme. If the borrower is unable to meet repayments, lenders will follow usual default processes.

I am a not-for-profit. Am I eligible for the Scheme and how do I access it?

Not-for-profits are eligible for the Scheme, provided they have turnover of less than $250 million and have an ABN. Non-profit bodies seeking to apply for the Scheme should contact a participating lender.

Will borrowers or guarantors be able to make complaints to the Australian Financial Complaints Authority (AFCA) with respect to loans made under the Coronavirus SME Guarantee Scheme?

Borrowers will still be able to make complaints to AFCA with respect to loans made under the SME Recovery Loan Scheme however AFCA will not take into account decisions to lend under the Scheme or the amount of a loan. Borrowers will still be able to have complaints heard by AFCA for other decisions of the lender, such as issues related to hardship or enforcement.

If the lender requires a guarantee for a loan under the Scheme, the guarantor will still be able to make complaints to AFCA with respect to this decision.

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
  • Fifo Capital Australia
  • Get Capital
  • Judo Bank
  • Liberty Finance
  • Moneytech Finance
  • National Australia Bank
  • Queensland Country Bank
  • Regional Australia Bank
  • Social Enterprise Finance Australia
  • South West Credit Union Co-operative
  • Suncorp-Metway
  • The Mutual Bank
  • TrailBlazer Finance
  • Unity Bank
  • Webster Dolilta Finance Ltd
  • Westpac