Coronavirus SME Guarantee Scheme - supporting the flow of credit
Information for small and medium businesses
The Coronavirus SME Guarantee Scheme will provide small and medium sized
business with timely access to working capital to help them get through the
impact of the Coronavirus.
The Government will provide eligible lenders with a guarantee for loans with
the following terms:

SMEs, including sole traders, with a turnover of up to $50 million.
Maximum total size of loans of $250,000 per borrower.
Loans will be up to three years, with an initial six month repayment holiday.
Unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

The decision on whether to extend credit, and management of the loan, will
remain with the lender. However, the Government expects that lenders will look
through the cycle to sensibly take into account the uncertainty of the current
economic conditions when determining whether credit should be extended.
As part of the loan products available, the Government will encourage lenders
to provide facilities to SMEs that only have to be drawn if needed by the SME.
This will mean that the SME would only incur interest on the amount they draw
down. If they do not draw down any funds from the facility, no interest will
be charged, but they will retain the flexibility to draw down funds should the
need arise.
SMEs interested in the Coronavirus SME Guarantee Scheme should approach their
financial institution for more information. The Government is working with
banks and other eligible lenders to ensure loans are available as soon as
possible. While the scheme officially commences from April 2020, your bank or
other lenders may be able to provide credit sooner, and still benefit from the
guarantee.
The Treasurer has varied the authorisation conditions for the Australian
Financial Complaints Authority (AFCA) scheme to limit the matters that AFCA
can consider in relation to certain decisions made by lenders under the
Coronavirus SME Guarantee Scheme.
Under the AFCA Scheme Authorisation (Additional Condition) Amendment
2020, the AFCA Scheme
Rules will be amended to limit AFCA’s ability to consider decisions made by
the lender about whether to provide a loan (and the amount of the loan) under
the Coronavirus SME Guarantee Scheme and ensure that when making assessments
or determinations about a complaint, AFCA gives consideration to the impact of
the coronavirus on the economy and the intent and requirements of the Scheme.
The amendments to AFCA’s authorisation conditions also apply to decisions made
by lenders (all lenders and not only those lenders that are participating
lenders under the Scheme) to approve repayment deferrals for businesses in
response to the coronavirus crisis. The amendments exclude from AFCA’s remit
complaints in relation to decisions by lenders to offer repayment deferrals to
businesses impacted by the coronavirus, and any consequential change to the
amounts payable under the loan or the duration of the loan.
AFCA will amend its Scheme Rules to give effect to this change and provide
further guidance for businesses and lenders. The changes to the rules will
apply for complaints made after 25 April 2020.  
View the list of participating lenders.