The SME bank will be participating in the revamped SME Recovery Loan Scheme, which will launch on Friday (1 October).
Judo Bank has confirmed that it will be participating in the federal government’s revamped SME Recovery Loan Scheme that aims to help all SMEs “adversely economically affected by the coronavirus pandemic”.
As announced in August, the government is removing the previous eligibility requirements for SMEs to be eligible under the SME Recovery Loan Scheme, given the ongoing COVID-19 pandemic and associated lockdowns.
From Friday (1 October), the expanded scheme will open up to SMEs that are dealing with the economic impacts of the coronavirus with a turnover of less than $250 million and will be able to access loans of up to $5 million over a term of up to 10 years.
It will still enable SMEs to access loans that are 80 per cent guaranteed by government, which can be used for a broad range of business purposes, including to support investment, or to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme.
Judo Bank has now confirmed that it will be offering loans under the expanded version of the scheme.
The SME bank’s chief executive, Joseph Healy, said that the lender would focus its lending support under the scheme on “businesses in the hardest hit industries”.
“The decision to expand this scheme to businesses impacted by the pandemic is welcomed by Judo and by the SME business sector, as it will enable eligible businesses to access vital credit, recover, and invest for the future,” Mr Healy said.
“Judo Bank will use this scheme to support the hardest hit pockets of the SME economy, such as hospitality, retail, travel and tourism, fitness, and childcare, as well as businesses that rely on walk-in customer demand which has been all but wiped out by lockdowns.”
According to Judo Bank’s latest SME Insights report, released this month, nearly half of Australian SMEs were seeking to grow their businesses, hire more staff, and invest in expansion despite uncertainty over the COVID-19 pandemic and prolonged lockdowns.
However, Mr Healy highlighted that despite the demand for lending, the report found that one in four SMEs were knocked back from accessing new funding, stifling plans for investment, hiring staff and growth.
“The latest SME Insights Report confirms that the SME economy remains focused on growth despite the many challenges it has faced, with over half of businesses surveyed intending to seek new funding or refinance in the next six months,” he said.
“Despite strong demand, the fact that one in four SMEs were knocked back from accessing new funding is incredibly disappointing given the huge amount of support and stimulus made available to lenders by Canberra.
“Judo was purpose built from the ground up to support Australian SME businesses with vital credit, and actively participating in the Government’s newly expanded SME Recovery Loan Scheme is yet another way we can support SMEs as they look to recovery.”
Several other lenders, including Westpac, have also this week confirmed their participation in the newly expanded scheme, ahead of its relaunch on Friday.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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