The Morrison government is extending the loan scheme for small businesses, introduced when the coronavirus pandemic first struck, for a further six months.
The SME Recover Loan Scheme was due to finish at the end of the year, but will be now be available until June 30, 2022.
Firms with a turnover of less than $250 million will be able to access loans of up to $5 million over a term of up to 10 years to help deal with the economic impacts of COVID-19.
However, with the economy showing signs of a strong rebound as restrictions ease, the government is reducing its loan guarantee from 80 per cent to 50 per cent.
Around 80,000 loans worth around $7.3 billion have been written since the scheme commenced in March 2020.
“The extension of the scheme continues our unprecedented support for SMEs and will help even more businesses get access to the funding they need to adapt, innovate and bounce back from the impacts of the pandemic,” Treasurer Josh Frydenberg said in a statement.
Under the scheme, lenders can offer borrowers a repayment holiday of up to 24 months and the loans can be used for a broad range of business purposes, including to support investment or to refinance any pre-existing debt.
“The Morrison government will continue to support small businesses as they seek to rebuild, adapt and create jobs as part of Australia’s economic recovery,” Mr Frydenberg said.