Posted on 17/4/2020
Banking & Finance
While the package is broad in its scope and aimed at assisting as many eligible SMEs as possible to navigate the impacts of COVID-19, there are some specific criteria that need to be met and technicalities businesses will need to work through in order to access the loan through their preferred lender.
Though not a comprehensive list, the following represents a top-line summary of the key eligibility criteria for the scheme:
According to Bruce Debenham, Director of Perks Banking & Finance, much of the confusion is likely caused by a lack of understanding about what the package is designed for and how businesses can access it.
“What we are seeing with this announcement, is a lot of businesses thinking that this is a handout from the Government that they are free to do with as they please, which is not the case,” he says.
“This loan package is different to many of the other economic support measures – while the loans are supported by a 50% guarantee from the Federal Government, each banks’ usual underwriting standards and credit criteria still apply.
“It’s also worth noting that, in most cases, there is no specific application form for these loans and businesses will need to take the time ensure they thoroughly prepare their application, which is an area where an experienced, well-connected commercial broker can really prove their worth.
As a guide, Bruce sets out the following questions that businesses owners will need to consider when preparing an application for a COVID-19 support loan:
“Naturally, some of these questions may be difficult, if not impossible to answer at this point in time but the more information that you can provide your bank the better, as it will make it easier for them to review your request,” he says.
Remember: how you present the information to your bank is critical and will lead to a speedier response.
The question that business owners must ask themselves is how much of their time are they willing to give to the loan application process vs. investing that time into preparing their business to operate in a post-COVID-19 world.
If the answer is “as little as possible,” it’s probably time to get on the phone to a commercial broker, or get a recommendation on one from your Adviser.
For more information, or if you would like assistance in preparing an application for your business to access the Federal Government-backed loan support package, you can contact Bruce Debenham, Director Perks Banking & Finance, on +61 8 8273 9223.
CLICK HERE to go to the Perks COVID-19 Resource Hub page for Banking & Finance FAQs
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