SME Loan Guarantee Scheme: Which businesses have been approved, and will you fit the bill for phase two?
As lenders gear up for phase two of the government’s SME Loan Guarantee Scheme, new Commonwealth Bank figures have emerged showing NSW and Victorian businesses have snagged the biggest piece of the scheme’s funding pie to date.
NSW and Victoria made up almost two-thirds of CommBank’s government-backed loans (38% and 26% respectively), while Queensland came in third place at 16%.
“Obviously different lockdown measures have impacted some businesses more than others and many of our customers, particularly those in the greater Melbourne and greater Sydney area, worked with our bankers to quickly ensure they had extra cash flow in case they needed it,” CommBank’s group executive for business banking, Mike Vacy Lyle said.
Under the first phase of the scheme, the government guaranteed half of all unsecured three-year business loans of up to $250,000 issued by participating lenders including CommBank, ANZ and 39 other smaller providers. Under phase two, the loan terms have been extended to five years, and loan amounts increased to $1 million.
Almost 20,000 small to medium sized businesses (SMEs) took advantage of phase one, with CommBank approving loans for 9,400 of these firms.
According to CommBank, nearly one-fifth of those businesses belonged to the property and business services sector (17%), while 16% came from retail, 14% from construction, and 14% from accommodation, cafes and restaurants - all industries that experienced high levels of disruption due to COVID-19.
What to expect from phase two
Now phase two has begun, with Treasurer Josh Frydenberg saying that the extended loan terms and amounts aim to help businesses shift gears from short-term survival and long-term investment.
And while uptake in the first phase was low - about $2 billion compared to the planned $44 billion - CommBank’s Vacy Lyle said they expect businesses will show much greater interest in the second phase.
“Not surprisingly, given the uncertainty about the timing and trajectory of the recovery, demand for credit has been somewhat modest but I expect we will see an increase in demand with the expansion of the scheme terms,” he said.
“This next phase of the scheme will allow some businesses to continue to trade through ongoing challenges and others to make important investment decisions that will set them up for the future.”
Phase two will run until 30 June 2021.
The Australian Financial Review (AFR) reported that another key difference with phase two is that the government has capped the interest rate at just over 10%, following reports that some lenders were charging scheme borrowers rates as high as 18%.
But while lower interest rates will benefit some industries, it may exclude others, said the Australian Finance Industry Association’s chief executive, Diane Tate.
“For example, fit-outs for restaurants, cafes or event spaces, some equipment used in gyms, and some IT equipment frequently used in offices in our cities and regional centres, will likely be out of scope,” she told the AFR.
However, “if you’re a manufacturing, mining, construction, transport or agriculture business who wants to use, say a three- or five-year loan to purchase a motor vehicle or other high-quality assets, this is good news.”
Ready to explore your unsecured business loan options? Scroll down below for a snapshot, or jump over to our business loans comparison table for a more extensive list.
Compare unsecured business loans - last updated January 25, 2021
Line of Credit
Zip Business Loans online application process can be completed in as little as five minutes, and once approved you can access the funds within 24 hours. A line of credit up to $500k that converts into a loan when you draw down.
Interest Rate
Upfront Fee
Funding Speed
On Application2% to 3%Instantly, once approvedLine of Credit
Zip Business Loans online application process can be completed in as little as five minutes, and once approved you can access the funds within 24 hours. A line of credit up to $500k that converts into a loan when you draw down.
- Loan type
- Line of Credit
- Security type
- Unsecured
- Minimum loan amount
- $10,000
- Maximum loan amount
- $500,000
- Minimum loan term
- 6 months
- Maximum loan term
- 3 years
- Minimum trading
- 18 months
- Minimum annual turnover
- $200,000
- Application speed
- 10 minutes
- Approval speed
- 24-48 hours
- Funding speed
- Instantly, once approved
- Upfront fee
- 2% to 3%
- Ongoing fee
- $0.00
- Late payment fee
- -
- Transaction fee
- -
- Early repayment penalty
- 0
- Other fees
- Various late payment fees may apply.
- Early repayments allowed
- Yes
- Repayment frequency
- Weekly, Fortnightly, Monthly
- Repayment types
- Principal & Interest
- Redraw allowed
- Yes
- Other benefits
- -
- Other restrictions
- -
Fully Drawn Loan
Heritage Banks Fully Drawn Business Loan is a good option for most business needs such as purchasing a property, buying a business or longer term working capital requirements.
Interest Rate
Upfront Fee
Funding Speed
2.95% p.a. variableNegotiableVariesFully Drawn Loan
Heritage Banks Fully Drawn Business Loan is a good option for most business needs such as purchasing a property, buying a business or longer term working capital requirements.
- Loan type
- Loan
- Security type
- Secured
- Minimum loan amount
- $20,000
- Maximum loan amount
- -
- Minimum loan term
- -
- Maximum loan term
- -
- Minimum trading
- Varies
- Minimum annual turnover
- Varies
- Application speed
- Varies
- Approval speed
- Varies
- Funding speed
- Varies
- Upfront fee
- Negotiable
- Ongoing fee
- $20 monthly
- Late payment fee
- $0.00
- Transaction fee
- -
- Early repayment penalty
- $0
- Other fees
- -
- Early repayments allowed
- yes
- Repayment frequency
- Weekly, Fortnightly, Monthly
- Repayment types
- interest only, principal and interest
- Redraw allowed
- yes - with $20 fee
- Other benefits
- -
- Other restrictions
- Residential Security Interest Rate. A break fee applies to fixed term loans if broken early.
Read our Mozo Review to learn more about the Fully Drawn Loan
Business Loan
Business loans available from $5K to $300K and funding possible in 24 hours. Prospa uses risk-based pricing to determine your interest rate, which can range from 14.95% p.a. to 24.95% p.a. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.
Interest Rate
Upfront Fee
Funding Speed
Interest rates vary based on risk. Rates range from 14.95% to 24.95% p.a.3%from 24 hoursBusiness Loan
Business loans available from $5K to $300K and funding possible in 24 hours. Prospa uses risk-based pricing to determine your interest rate, which can range from 14.95% p.a. to 24.95% p.a. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.
- Loan type
- Loan
- Security type
- Secured
- Minimum loan amount
- $5,000
- Maximum loan amount
- $300,000
- Minimum loan term
- 3 months
- Maximum loan term
- 3 years
- Minimum trading
- 6 months
- Minimum annual turnover
- $25,000
- Application speed
- 10 Minutes
- Approval speed
- Same-day approval
- Funding speed
- from 24 hours
- Upfront fee
- 3%
- Ongoing fee
- $0.00
- Late payment fee
- $0.00
- Transaction fee
- -
- Early repayment penalty
- $0.00
- Other fees
- -
- Early repayments allowed
- yes
- Repayment frequency
- Weekly
- Repayment types
- Principal & Interest
- Redraw allowed
- no
- Other benefits
- -
- Other restrictions
- -
Line of Credit
Heritage Banks Business Line of Credit is a flexible form of finance, allowing you to decide when to make principal reductions, plus the ability to re-use these funds at any time during the term of the facility.
Interest Rate
Upfront Fee
Funding Speed
3.75% p.a. variableNegotiableVariesLine of Credit
Heritage Banks Business Line of Credit is a flexible form of finance, allowing you to decide when to make principal reductions, plus the ability to re-use these funds at any time during the term of the facility.
- Loan type
- Line of credit
- Security type
- Secured
- Minimum loan amount
- $50,000
- Maximum loan amount
- $500,000
- Minimum loan term
- -
- Maximum loan term
- -
- Minimum trading
- Varies
- Minimum annual turnover
- Varies
- Application speed
- Varies
- Approval speed
- Varies
- Funding speed
- Varies
- Upfront fee
- Negotiable
- Ongoing fee
- $20 monthly
- Late payment fee
- $0.00
- Transaction fee
- First five transactions free, then $2.00 per transaction.
- Early repayment penalty
- n/a
- Other fees
- -
- Early repayments allowed
- n/a
- Repayment frequency
- Monthly
- Repayment types
- n/a
- Redraw allowed
- n/a
- Other benefits
- -
- Other restrictions
- -
Read our Mozo Review to learn more about the Line of Credit
Short Term Business Loan
Unsecured business loans from $10,000 - $250,000, over 6 to 24 months. Online application takes only 10 minutes and you'll know if you're approved within hours. Apply now.
Interest Rate
Upfront Fee
Funding Speed
On Application3.00%from 24 HoursShort Term Business Loan
Unsecured business loans from $10,000 - $250,000, over 6 to 24 months. Online application takes only 10 minutes and you'll know if you're approved within hours. Apply now.
- Loan type
- Loan
- Security type
- Unsecured
- Minimum loan amount
- $10,000
- Maximum loan amount
- $250,000
- Minimum loan term
- 6 months
- Maximum loan term
- 2 years
- Minimum trading
- 1 year
- Minimum annual turnover
- $100,000
- Application speed
- 10 Minutes
- Approval speed
- from 24 Hours
- Funding speed
- from 24 Hours
- Upfront fee
- 3.00%
- Ongoing fee
- $0.00
- Late payment fee
- $0.00
- Transaction fee
- $0.00
- Early repayment penalty
- $0.00
- Other fees
- -
- Early repayments allowed
- No
- Repayment frequency
- Daily, Weekly
- Repayment types
- Principal & Interest
- Redraw allowed
- Eligible to apply for renewal after 50% paid down
- Other benefits
- -
- Other restrictions
- Minimum $100k turnover and 1 Year in Business.
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