Westpac announced today that thousands of Australian businesses have not yet taken advantage of Merchant Choice Routing (MCR), and it will be taking a proactive role in helping merchants activate the service.Over the coming months, Westpac will reach out to merchant customers who stand to benefit from MCR, and unless they opt against it, will switch them over.Westpac chief executive business division, Guil Lima estimates that around 37,000 small businesses will be better off using the service.“Westpac’s decision today will help merchant customers with Westpac owned terminals activate pricing that’s best for them, giving them one less thing to worry about at an already very challenging time,” he said.
As many small businesses struggle to find their footing in a COVID-safe economy, the federal government has stepped in with another lifeline: an expansion of its SME Loan Guarantee Scheme.Under the existing scheme, the government guarantees 50% of business loans issued by participating lenders to small to medium-sized enterprises (SMEs). This guarantee initially covered three-year unsecured loans of up to $250,000 and was set to end on 30 September 2020. But the latest move means SMEs can soon access much larger loans of up to $1 million via the scheme and repay them over a longer period of five years. This second phase will run from 1 October 2020 until 30 June 2021. In other words, it’s due to start a day after a number of government stimulus programs (including the cash flow boost and apprentice wage assistance) expires.Phase two will also include secured loans (except if the collateral is commercial or residential property), and apply to a broader range of funding purposes beyond working capital.Treasurer Josh Frydenberg said the expansion reflects a shift in the government’s focus from aiding businesses’ short-term survival to supporting their investment in the longer run as they emerge out of COVID-induced ‘hibernation’.It comes after recent research found over a quarter of SMEs see lack of available funding as their biggest barrier to innovating and growing for the rest of 2020.A total of 41 lenders are currently participating in the scheme, including the big four banks (ANZ, Commonwealth Bank, NAB, Westpac) as well as non-bank lenders such as GetCapital, OnDeck, Prospa and Spotcap. So far, uptake has been lower than expected, with 15,600 businesses getting their hands on loans worth $1.5 billion, compared to the planned $40 billion. But CommBank’s chief executive, Matt Comyn said the expanded scheme will play an important role in small business recovery in the months ahead.“It is clear from the challenges that we are currently facing in Victoria that the recovery will not be as smooth or quick as first thought, which is why it is essential we come up with creative solutions that offer small businesses in particular different ways to play their part in helping the country and Australians get back on their feet,” he said. “[The] lifting of the amount available to $1 million and the loan extension to five years will allow SMEs … to make the investments needed to get people back to work, create new jobs and lift confidence across the economy.” NAB’s chief executive, Ross McEwan also welcomed the expansion. He said the changes will make the scheme “available to more businesses, for longer, to help them rebuild - and support Australia’s recovery.” Looking for extra finance to pay your staff or buy new equipment? Get started with a few deals below, or jump over to our business loans comparison table for even more options.
For many small business owners, a key ingredient to staying afloat in 2020 has been accessing professional advice. As new research shows, a whopping 74% turned to a financial advisor for support amid coronavirus shutdowns.