ScotPac Bounce Back Fund: interest waived for first three months on new SME loans

A mechanic at work.
Photo by Andrea Piacquadio.

Business lender ScotPac will waive the first three months of interest on loans to small and medium-sized businesses as part of its new Bounce Back Fund.

It announced the $100 million working capital fund today, which it hopes will help Australian businesses resume trading and expand operations as the economy reopens.

Up to $1 million in additional funding will be made available to both new and existing ScotPac clients, via Debtor Finance or Trade Finance facilities. 

The offer will close in April 2022 or when the $100 million fund is exhausted. Applications will be considered on a ‘first come’ basis.

By waiving interest on the first three months of the loan, ScotPac hopes to help businesses weather the initial months of post-lockdown trading, when slow or bumpy revenue flows are to be expected.

According to ScotPac, “the initial interest cost is being completely waived for the business owner and borne by ScotPac, as opposed to being deferred and compounded like the loan repayment holidays offered by some banks.”

RELATED: SME Recovery Loan Scheme expanded to help beat lockdown slump

Lockdowns and border closures have caused headaches for thousands of small and medium-sized businesses, but government programs such as the SME Recovery Loan Scheme have helped to minimise the impact.

Under the scheme, SMEs impacted by COVID-19 can access low-rate loans of up to $5 million through participating lenders, with the Government guaranteeing 80% of the loan amount.

Customers are also allowed to pause repayments for up to 24 months, however interest will continue to accrue and will have to be repaid once the repayment holiday period ends.

While ScotPac did not participate in the SME Recovery Loan Scheme, its Bounce Back Fund will provide additional support to businesses as the scheme winds up at the end of this year.

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