Here is a summary of keys points of the COVID-19 SME Guarantee Loans:
The maximum total size of loans of $250,000 per borrower.
Loans must be for business purpose – specifically for working capital purposenot be used for asset purchases or refinancing
The loan terms will be up to three years, with an initial six-month repayment holiday (repayment holiday is optional)
The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
The loan includes online redraw capability, which means customers will only pay interest on drawn balances.
Rates being offers are from 4.5%
CBA and NAB are offering this too new to bank and existing customers - Westpac is existing customers only at this stage – ANZ will be the same when released
All lenders have stated that the quickest and easier path for clients here is through your existing Business bank – either through your Business Banking Relationship Manager or via the website – feel free to reach out to us for specific ways to get this started.
Applicants will need to show they can repay the loan within 2.5 years based on financial data provided against the banks servicing thresholds
Loans will be available up until 30 September 2020.
Each bank is supporting these loans through has a new fast track application and approval process (see below)
No application or loan service fees will apply
1. Client / SME to make an initial enquiry - either through your business relationship manager, phone, or via an online form on the bank’s website 2. A bank representative will then make contact with Client / SME - timeframes vary between 2 - 5 days – this is a Pre-qualification call of the client and loan needs 3. Bank sends application form for completion plus list of required documents required (see below) 4. Client / SME completes an application form and provides supporting documents 5. Application assessment and approval/decline 6. Loan offers documents sent to the client 7. Client / SME signs loan offer documents– banks are offering an online / email solution for this. 8. Settlement > Disbursement of funds.
Banks are hoping that for existing customers who turnaround the required information quickly (1-2 days), that this process should take only a few weeks to settle the funds.
New to bank customers timeframes will be longer as their document requirements will be more and assessment of their application will, therefore, take longer.
SUPPORTING DOCUMENTATION REQUIRED
Each banks documentation requirements are slightly different, but you will need to have your last 6-12 months BAS statements AND / OR your 2019 Financials statements (depending on the client, business, industry and existing relationship to the bank)
We suggest having your last 12 months BAS statements PLUS 2019 Financials statements available to assist for both the Pre-qualification chat (step 2 above) and for loan submission (step 4 above) in case they ask for both.
After your initial Pre-qualification call, the bank will send the client a list of docs required PLUS an application form to complete