Katy Holliday - 23 Aug, 2021

Moneytech Finance calls for extension of SME Recovery Loan Scheme

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Non-bank Fintech lender Moneytech Finance is urging the federal government to extend the Small-to-Medium Enterprises (SME) Recovery Loan Scheme in the wake of continuous lockdowns in order to bolster small businesses across the country that are suffering under restrictions.

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The government’s Coronavirus SME Guarantee Scheme was introduced on 1 October 2020 and finished on 30 June 2021. The scheme ensured SME borrowers impacted by the pandemic could access up to $1 million in credit with the government providing a 50% guarantee to accredited banks and lending institutions.

Woman putting an "open" sign on the door of her small business

Moneytech’s Chief Executive Officer Nick McGrath said that “with the extended lockdowns across the country, particularly in NSW and Victoria, we have seen a material uplift in SMEs requesting working capital support to help them through the pandemic.”

The government announced in March this year that an additional SME Recovery Loan Scheme would be implemented to support those businesses that were relying on the JobKeeper payment between 4 January 2021 and 28 March 2021. The scheme would also be available to those in eligible local government areas in NSW and Queensland that were suffering hardship from the floods in March.

Small business owners struggling through the pandemic

“Under both the SMEG2 and SMEG3 programs, Moneytech has been able to originate in excess of $50m worth of lending facilities supporting over 150 SMEs. The benefit of the SMEG2 program was that it supported most SMEs with lending up to $1.0m, the SMEG3 program is excellent but the borrower’s eligibility is much narrower as the client must have collected Jobkeeper between the 4th of January 2021 and the 28th of March 2021,” McGrath said.

With 60% of Australians under lockdown across July and August, McGrath is calling for the program to be extended to provide support for SMEs impacted by the rolling lockdowns and restrictions.

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“We believe with an extension of phase 2 of the SME Loan Recovery scheme that many businesses facing hardship will be able to access vital working capital to assist ongoing trading. Lenders such as Moneytech sit waiting and ready to work with the federal government on such initiatives,” he said.

“Our customers have given us very strong feedback, that whilst previous Government support has been appreciated, they are now facing a new struggle with no end in sight and are looking to finance providers to help. I believe lenders are better positioned to achieve this with further support, similar to SMEG2 & SMEG3, from the Federal Government,” McGrath continued.

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In July, the federal government announced new economic support programs for businesses and individuals impacted by lockdown restrictions. This includes a new SME business support payment for people and businesses located in areas that endure a fourth week or more of lockdown.

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Words by Katy Holliday

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