COVID-19: Update March 27 2020

27 March 2020

The details of two Government backed loan programs, designed to help those businesses suffering from COVID-19, have now been confirmed. One is a Queensland State Government program to be administered by the Queensland Rural and Industry Development Authority (QRIDA). The other, a Federal Government supported program to be administered by commercial banks. Details of each program is below.

 
Queensland COVID-19 Jobs Support Loans
 
Key details of the Queensland COVID-19 Jobs support loan are:

  • Loan available up to an amount of 50% of an eligible entity’s annual wages, to a maximum of $250,000.

  • 10 year term with no repayments or interest charged for the first 12 months, interest-only payments for 2 years and principal and interest repayments for the remainder of the term.

  • Fixed Interest rate of 2.5%.

Main Eligibility Criteria for this Concessional Loan:

  • GST Registered Business.

  • Have one or more equivalent full-time employees (this can include owners if they work in the business).

  • Have been in operation since 1 July 2017.

  • Ability to demonstrate that they have suffered a loss of income as a result of COVID-19.

The purpose of these Concessional Loans, are to assist with meeting the entity’s working capital expenses (e.g. wages, creditors, existing loan/finance payments, rent, rates and purchasing goods).  Ineligible expenses for this loan include; refinancing existing business loans and purchasing new equipment/assets.
 
For further details and guidelines in relation to this Concessional Loan Program, follow this link:
 
http://www.qrida.qld.gov.au/current-programs/covid-19-business-support/queensland-covid19-jobs-support-scheme
 
 
Commonwealth Backed COVID-19 Support Loans
 
The Federal Government has previously announced the Coronavirus SME Guarantee Scheme, where the Government will guarantee 50% of new loans issued to SMEs.

These loans are available through Commercial Banks and details of these loans will vary between banks and business, however, common features appear to be:

  • Unsecured Loans.

  • Up to $250,000 available to support businesses with working capital to survive the COVID-19 crisis.

  • Interest rate lower than usual overdraft facilities (5% in one example, however, this will vary business by business).

  • Loan terms are up to 3 years

  • No repayments for the initial 6 months, however, interest will capitalise at this point

  • Principal and Interest repayments are required for the remaining term.

For more details of the Government’s announcement of this Scheme, follow this link:

https://treasury.gov.au/coronavirus/sme-guarantee-scheme

Details in relation to the various loan terms of each particular program are obtainable through each separate Commercial Bank.

Before accepting any of these loans, we encourage you to get professional advice and understand the guarantee requirements (these will vary depending on the program, Amount borrowed and business).
 
If you need assistance with applying for any of these programs, please contact Darren, Shaun or one of our team.

 

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