Fintech calls for SME Recovery Loan Scheme extension

The government’s most recent phase of Coronavirus Small-to-Medium Enterprises (SME) Loan Guarantee Scheme was open until 30 June 2021 for businesses that were impacted by the coronavirus pandemic.

Under phase 2 of the scheme, the government provided a 50 per cent guarantee to participating lenders to enhance their ability to extend up to $1 million in credit to SMEs.

In March, the government announced an additional SME Recovery Loan Scheme to cover businesses that were receiving the JobKeeper payment between 4 January 2021 and 28 March 2021, as well as those in eligible local government areas impacted by the floods in NSW and Queensland in March.

However, given the fact that approximately half of Australia’s population (around 13 million people) are currently in lockdowns due to a resurgence of coronavirus caused by the virulent delta variant, the CEO of SME lender Moneytech is calling for the scheme to be extended to SMEs impacted by these new restrictions.

Moneytech’s chief executive officer, Nick McGrath, said: “With the extended lockdowns across the country, particularly in NSW and Victoria, we have seen a material uplift in SMEs requesting working capital support to help them through the pandemic.”

According to Mr McGrath, the lender originated more than $50 million worth of lending facilities to approximately 150 SMEs under the most recent two phases of the SME Recovery Loan Scheme, but added that more could be done to help SMEs at this time.

“Our customers have given us very strong feedback, that while previous government support has been appreciated, they are now facing a new struggle with no end in sight and are looking to finance providers to help. 

“I believe lenders are better positioned to achieve this with further support, similar to [the previous SME Guarantee offerings] from the federal government.” 

Mr McGrath continued: “We believe that, with an extension of Phase 2 of the SME Recovery Loan Scheme, many businesses facing hardship will be able to access vital working capital to assist ongoing trading. 

“Lenders such as Moneytech sit waiting and ready to work with the federal government on such initiatives”. 

Earlier this month, the Commonwealth government announced new economic support offerings for individuals and businesses that are subject to lockdown restrictions, including a new SME business support payment for areas that enter a fourth week of lockdown.

[Related: NSW releases COVID-19 support for SMEs and individuals]