SMEs should leverage the federal SME Recovery Loan Scheme

Businesses should to take advantage of the government’s generous SME Recovery Loan Scheme before applications close on 30 June 2022. The SME Recovery Loan (SRL) Scheme is providing much-needed financial assistance to many SMEs who would otherwise not be able to access business funding to help their business through the challenges of COVID. 

What can the SRL Scheme do for businesses?

The SRL scheme not only offers concessions, it is also backed by gov’t. Initially, the gov’t guaranteed 80% of the loan which meant financial firms were able to provide loans to businesses with limited risk. The guarantee has since been reduced to 50% however this still provides much-needed backing enabling financiers to continue to assist businesses.

There is no doubt that COVID has ravaged many businesses and affected the financial health of organisations that normally have very good credit histories. Because of this, most banks won’t help them. Fortunately the SRL scheme is helping to resolve this. Specialist financial providers like Earlypay have stepped up to the plate to assist businesses impacted as well. 

To date, the SME Recovery Loan scheme has helped tens of thousands of businesses to access vital funding since it was launched. In fact it has been so popular that the government extended it until 30 June 2022. With this date fast approaching, businesses now need to ensure they take advantage of this facility before applications close at the end of the month.

How effective has the SRL been so far?

The SRL scheme commenced from April 2021 to support economic recovery by providing continued assistance to SMEs dealing with the economic impacts of the coronavirus crisis. The scheme enhances lenders’ abilities to provide cheaper credit to otherwise viable SMEs for additional funding to get through the pandemic, recover and invest for the future. 

Invoice Finance is also available through the SME Recovery Loan scheme which means businesses can utilise the support to fund a broad range of expenses across their business. Businesses can access up to $5 million in total. In addition to the increased ability for businesses to access funding, the interest rate on loans is also capped at around 7.5%.

I strongly encourage businesses to enquire about the SME Recovery Loan (SRL) scheme. Many financial providers offer funding through the scheme including Earlypay. It might just be the lifeline that helps many businesses to get through the next 12 – 24 months.

Daniel Riley is a finance expert and the Chief Executive Officer of Earlypay.