COVID Proofing Your Business – Programs To Help Businesses Through This Difficult Time

Business communities in Australia have been badly affected by extended shutdowns and restrictions imposed on activities because of Coronavirus. Governments both at the federal as well as state levels have announced relief packages for businesses battling this pandemic.

SME Scheme for Small Businesses Affected Due To Covid-19

This scheme launched by the government to help businesses adversely affected by Covid-19 is SME Guarantee Scheme. This program improves the ability of the lenders to provide easy credit to business entities to bail them out of tricky situations caused by Covid-19. This initiative is a part of the economic stimulus package announced by the federal government. Federal government will provide backing to lenders for loans of up to $250,000 given to SME entities.

Here is how these loans work:

  • Duration of loan is a maximum of 3 years
  • Loans will carry a moratorium of 6 months on repayments
  • Businesses will not be asked to provide collateral for these loans
  • These loans will include term loans and overdraft facility, but credit card facility is not allowed
  • Lenders will have the freedom to set their own interest rates

Loans to eligible business entities will be made available through commercial banks.  If the existing lender of the SME is not participating in this scheme, it can avail loans from other participating lenders. To be eligible for loans under this scheme, the total turnover of the business in the previous year should be less than $50 million. If the business is new, its expected turnover for the current year should be less than $50 million. Not-for-profit organisations are also eligible for loans under SME Guarantee Scheme. The only requirement imposed by lenders is that the money should be used for business purposes only. It cannot be used to pay for rent or the expenses incurred on the workforce.

Small Business Covid-19 Adaptation Program

As the name suggests, small business Covid-19 adaptation program is an initiative of the government of Queensland and aims to support businesses badly affected by Coronavirus. The application process for Southeast Queensland is closed as funds for the program have been exhausted. Applications for Round 2 of Regional Queensland are still being accepted as only 72% of the sanctioned funds have been exhausted until now. An important thing to remember here is that a business qualifies as Regional Queensland if the area of operation is in a local government that does not come under Southeast Queensland location.

Eligibility Criteria:

  • Your business must have been severely impacted by Covid-19 restrictions as announced by the government as of 23rd March, 2020
  • It should have registered a decrease of at least 30% in annual turnover
  • It should have fewer than 20 employees
  • It should have an ABN as of 23rd March, 2020
  • Its headquarters is in Queensland
  • It should be registered under GST
  • Total turnover for the last financial year should be higher than $75,000

Above mentioned grants are only some of the many incentives the Australian State and Federal Governments are providing to support various businesses affected by Covid-19. To know more about such grants please speak to one of our advisors on the number mentioned below.

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