In an uncertain economic environment, the conditions to access working capital become tighter and as a result the flow and benefit of working capital is reduced. In this current environment and due to Government restrictions to help “flatten the curve”, revenue is speculated and continually dropping, money is tied up in assets without clarity on return and overall there is a rapid halt in spending within an economy.

In an effort to try and stabilise the economy and help small business fight for their survival, the Government has announced an SME Guarantee Scheme which will provide business with access of up to $250,000 with an initial 6-month repayment holiday.

SME Guarantee Scheme

Under the SME Guarantee Scheme, the Government will provide a guarantee of 50% to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. Applicants will be subject to lenders credit assessment processes with the expectation that lenders will look through the cycle, to sensibly take into account the uncertainty of the current economic conditions. The terms of the loan will be:

  • Maximum total size of loans of $250,000 per borrower.
  • The loans will be up to 3 years, with an initial 6-month repayment holiday.
  • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

The Reserve Bank of Australia (RBA) funding facility for the banking system, will give the banks access to at least $90 billion in funding at a fixed interest rate of 0.25 per cent. This will reduce funding costs for banks, which in turn will help reduce interest rates for borrowers.

Who is eligible and how does it work?

 SME’s with a turnover of up to $50 million will be eligible to receive these loans. As part of the loan products available, the Government will encourage lenders to provide facilities to SME’s that only have to be drawn if needed – the SME will only incur interest on the amount they draw down, on top of an initial 6-month repayment holiday.


The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30th September 2020.

How to Apply

If you’re interested in the Coronavirus SME Guarantee Scheme you should approach your financial institution for more information. At this stage participating lenders include NAB, Westpac and CBA with others offering different packages to help. See here for a summary of what different lenders are offering.


During the uncertain economic landscape that we are facing, businesses are doing all that they can to pay suppliers, retain employees and push through with business as usual. Government backed schemes such as the SME Guarantee Scheme can provide working capital and act as support and a lifeline to survive these dark times and be ready for when the world returns to normal.

Let Us Help

 If your business has a turnover of over $1 million, ABJ Solutions is offering a complimentary 30 minute Zoom meeting to help answer questions and model critical decisions with you. Get in touch with us today so that we can help guide you through this challenging time.