More small and medium-sized businesses may be eligible for the Business Finance Guarantee scheme, with a simplified and expanded scheme now in place.
Participating banks can provide new loans, increased limits to existing loans or a revolving credit facility to eligible businesses. The scheme supports banks to take on lending by government taking on the default risk of up to 80% of the loan.
Changes to the scheme mean the loans can be used for capital purchases and projects in response to or recovery from COVID-19. This means businesses can use the credit, for example, to modify their premises to operate at different alert levels. Additional changes to the scheme have made it available to larger businesses (revenue up to $200m) and offering a higher lending limit ($5m).
The Crown has also clarified that it will guarantee its share of any loan without a personal guarantee – though banks make their own lending decisions and may have their own requirements. Borrowers are still liable to pay the loan back in the usual way.
You can see more information about support for businesses affected by COVID-19 here.
As always, please ensure you discuss any of this with your advisors to ensure this is the best course of action for you to take. Contact the team at Ontrack to come in and discuss this with us.