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How to apply for a loan under the SME Recovery Loan Scheme

5-minute read

If your business was relying on JobKeeper support this year or was adversely economically affected by the March 2021 floods1, a loan under the SME Recovery Loan Scheme could help your business recover and grow.

 

We’ve broken down the requirements for a Westpac Business Loan under the SME Recovery Loan Scheme and the steps you can take to apply.

 

Key take-outs

  • If your business was relying on JobKeeper support this year or was adversely economically affected by the March 2021 floods1, a loan under the SME Recovery Loan Scheme could help your business recover and grow.
  • Westpac Business Loans under the SME Recovery Loan Scheme have loan terms of 3, 5 or 10 years.
  • When applying for a loan under the SME Recovery Loan Scheme, you’ll need to provide documents outlining your business financials. 

 

Step 1: Check your business meets the eligibility criteria

The first thing you’ll need to do is check if your business is eligible for a Westpac Business Loan under the SME Recovery Loan Scheme.

To be eligible, your business will have:

  • Received (or entitled to receive) a JobKeeper payment between 4 January 2021 and 28 March 2021; or
  • Been adversely economically affected by the floods in March 2021 and be located or operate in the relevant Local Government Areas (LGA).1

 

Your business must also meet the below eligbility criteria:

  • Have an annual turnover of less than $250 million
  • Have a valid ABN
  • Be trading for more than 12 months
  • Be a tax resident of Australia – that is based, registered and operating in Australia.

 

For more details on eligibility visit the Government’s Treasury website.

 

If your business isn’t eligible for the SME Recovery Loan Scheme, we have other business finance solutions that may suit your business needs. 

Step 2: Know what you want to use the loan for

The next step is to think about what you want to use the loan for. It’s important to ensure a loan under the SME Recovery Loan Scheme suits your situation and what you intend to use it for. 

 

Loans issued under the Scheme can be used to refinance existing loans or for a broad range of businesses purposes including:

  • business assets
  • working capital
  • commercial property
  • acquiring another business.

 

Loans cannot be used to: 

  • purchase residential property;
  • purchase financial products;
  • lend to an associated entity; or
  • lease, rent, hire or hire purchase existing assets that are more than half way into their effective life.

Step 3: Know how much you want to borrow

Under the Scheme, you can access loans of up to $5 million in total with loan terms of up to 10 years.

 

Before applying, it’s a good idea to think about:

  • How much you’ll need 
  • How much you can afford to repay
  • What your repayment schedule looks like
  • How your repayment schedule may affect your cashflow.

Step 4: Think about what loan term will suit your business 

The length of your loan will impact your repayment amounts and the amount of interest you end up paying over the life of the loan. The longer the length of the loan, the lower your monthly repayments will be but the more interest you’re likely to pay.

 

Westpac Business Loans under the SME Recovery Loan Scheme have loan terms of 3, 5 or 10 years.

 

Consider which loan term may suit your business and how the loan term will affect your monthly repayments and interest.

Step 5: Know what you could provide as loan security

You will need to provide security if you choose to take out a SME Recovery Loan. For more information on what security may be used please contact us.  

 

It is important to note that loans cannot be secured by residential property.

Step 6: Consider if you need a repayment deferral

Westpac loans under the SME Recovery Loan Scheme, have options to defer repayments for 6 or 12 months.2

 

Before choosing to defer repayments it’s important to understand that interest and fees will accrue during the period of deferral and will be added to the loan balance. An interest rate premium may also apply if you choose to take up a repayment deferral.    

Step 7: Prepare your paperwork

When applying for a loan under the SME Recovery Loan Scheme, you’ll need to provide documents outlining your business financials. 

 

To ensure you’re prepared when you speak to one of our Business Lending Specialists, have these details handy.

Step 8: Submit your enquiry

You’re now ready to submit your enquiry.

 

We have an enquiry form to get you started. Once you’ve submitted your enquiry, a Business Lending Specialist will be in touch to talk you through next steps. 

 

If you’re an existing Westpac customer with a Relationship Manager, they’ll contact you directly. 

 

Please be aware that COVID-19 has impacted the time it takes to process and follow up applications but we’ll aim to contact you as soon as possible.

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Things you should know

This article is a general overview and should be used as a guide only. We recommend that you seek independent professional advice about your specific circumstances before acting. Product and feature details available under the SME Recovery Loan Scheme will vary by provider.

1. Adversely economically affected by the floods in March 2021 and who are located or operated in a flood affected Local Government Area (LGA) as published by the Commonwealth on the Scheme’s Treasury website.  

2. An interest rate premium may apply where a payment deferral period is selected. Interest will accrue during the period of the repayment deferral.