SME RECOVERY PLAN PROVES BIG RELIEF

SMALL businesses are tapping into the federal government’s SME recovery scheme to build cash piles to combat stop/start lockdowns or join the mass migration to online shopping, according to Australia’s biggest bank.

Commonwealth Bank has lent almost $2bn to small and medium-sized enterprises (SMES) as part of the scheme, which allows businesses to borrow up to $5m over a term of up to 10 years, with the government guaranteeing 80 per cent of the loan.

CBA executive manager of business lending Clare Morgan said some businesses had used it to shift towards online, reinventing their operations, or to build financial buffers.

Ms Morgan said it was difficult to determine how much of the $2bn CBA had lent to small businesses had been drawn down, given levels change frequently. Regardless, the aim was to ensure smaller businesses had the confidence to invest in their operations and support the economy.

“Even if you haven’t utilised it, knowing that it’s there can give you confidence,” Ms Morgan said.

For businesses taking advantage of the scheme, loan approval must be received by December 31 and loans must be drawn down within 90 days.