Australia expands loan scheme for virus-hit firms, raises limit
[SYDNEY] Australia will extend its coronavirus loan guarantee scheme for small businesses and increase the credit limit to up to A$1 million (S$971,789) from A$250,000, Treasurer Josh Frydenberg said on Monday.
The expanded scheme, which will begin in October this year and run till June 2021, will also allow businesses with a turnover of under A$50 million to apply for loans to fund their investment plans.
Current rules allow businesses to use the loan only for working capital purposes.
"The next phase of the coronavirus small and medium enterprises guarantee scheme will help businesses move out of hibernation, successfully adapt to the new Covid-safe economy and invest for the future," Mr Frydenberg said in a statement.
The government will continue to guarantee 50 per cent of the loan and the repayment period has been increased to five years from three years.
Under the plan, banks also have the discretion to offer a repayment holiday period.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The pandemic has wreaked havoc on Australian economy and the government has pledged over A$160 billion, or 8 per cent of gross domestic product, in fiscal stimulus to shore up the economy.
Australia has been among the most successful countries in curbing the spread of the coronavirus but an outbreak in the state of Victoria has dimmed hopes of a faster and sharper economic recovery.
More than 15,600 businesses so far have applied for loans worth A$1.50 billion in the first phase of the plan, which is due to end on Sept 30, 2020, according to government estimates.
REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Beijing city to subsidise domestic AI chips, targets self-reliance by 2027
China passes tariff law as tensions with trading partners simmer
Blinken meets Chinese counterpart Wang Yi in Beijing
South Korea’s public finances no longer a credit rating ‘strength’: Fitch
UK consumer confidence improves as inflation and taxes fall
Inflation in Japan’s capital falls below BOJ target, slows for second month