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Westpac has announced details of its new offering under the Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme, including interest rates for small businesses.
The details of the new offering have followed the appointment of the major bank on to the panel of the second phase of the scheme earlier this month.
Under its new offering, for a three or five-year fully secured fixed and fully drawn loan product with a secured loan of up to $1 million, the bank is offering a fixed interest rate of 2.94 per cent when secured by a mortgage over owner-occupied commercial real estate when customers apply by 18 December 2020.
The bank is offering an interest rate of 3.38 per cent for a loan of up to five years, full secured variable, and 4.48 per cent for a loan of up to five years unsecured variable.
The loans are available for new and existing eligible customers.
Additionally, the big four bank has launched a new online form to assist businesses with their application process.
Commenting on the announcement, Westpac business division CEO Guil Lima said the SME Guarantee Loan Scheme offer from the bank would assist SMEs looking to reopen, grow and invest.
“It remains a very challenging and uncertain time for many small businesses, as some look to reopen, others rebuild, and sadly some are undecided about their future.
“We know what an important and meaningful role small business plays in our economy and communities, which is why Westpac is doing everything we can to help them out the other side,” he said.
Moneytech joins scheme panel
Business finance lender Moneytech has been appointed by Treasury to participate in phase two of the Coronavirus SME Guarantee Scheme, joining 14 other lenders on the panel, including the major banks.
Nick McGrath, Moneytech CEO, said the lender’s access to the scheme would address the need for micro SMEs to navigate the operating environment, and said the lender is positioned to roll out the scheme to its referral network and direct customers.
“The past few months have been challenging for most operators, but this shouldn’t automatically exclude businesses from receiving finance at a time when they need it most,” he said.
Mr McGrath said non-bank lenders such as Moneytech could continue to provide finance to SMEs as “some traditional financiers have started to scale back”.
“For us, it has been business as usual in an unusual time,” he said.
“We’ve continued lending to new customers, and supported our existing customers with the additional funding they need to help them through this period. Access to this scheme is a great outcome for Moneytech and the wider SME business community.”
He added that he expects to see a substantial take-up of loans under the scheme including the lender’s line of credit product, debtor finance, trade finance and equipment finance.
Under the second phase of the government’s scheme, which commenced on 1 October, the maximum loan size has increased from $250,000 per borrower to $1 million per borrower, allowing secured products and increasing from the previous three-year limit to five years.
The first phase of the scheme received criticism from various quarters, including banks, brokers and non-banks, and saw limited uptake of the loans.
According to Treasury figures, as of 25 September, the scheme, which is worth $40 billion in total, has supported just 20,611 loans worth $1.9 billion under phase one of the scheme.
A total of 15 lenders have been appointed to participate in phase two of the scheme thus far, including the major banks.
The participants include:
- ANZ
- Commonwealth Bank of Australia
- Westpac
- National Australia Bank
- Banjo
- Community First Credit Union
- Credabl
- Finstro Securities
- GetCapital
- Liberty Financial
- Metro Finance
- Moneytech Finance
- Regional Australia Bank
- Social Enterprise Finance Australia
- Unity Bank
[Related: SME COVID-19 loans top $40bn: ABA]
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