On December 13, 2021 the Australian government announced it would be extending its SME Recovery Loan Scheme (SMRL) program, which provides small and medium-sized businesses with Government guaranteed loans of up to $5 million to help their business recover from the impacts of the coronavirus pandemic. The SMRL was initially introduced in April 2021 to enable lenders’ to provide cheaper credit to eligible SMEs. This has helped SMEs to get through the pandemic, begin to recover and start investing for the future.

Under the existing SME Recovery Loan Scheme, loans were available from 1 April 2021 until 31 December 2021 with a Government guarantee of 80%. Under the new 2022 Scheme expansion, loans are available from 1 January 2022 until 30 June 2022, with a Government guarantee of 50%. The SMRL has been extended from January 1, 2022, and will be available to eligible businesses until June 30. The Australian government’s

Key features of the new SME Recovery Loan Scheme:

  • the expanded Scheme commenced on 1 January 2022 and will close 30 June 2022.
  • the Government will guarantee 50% of the loan amount
  • borrowers can access up to $5 million in total
  • loans can be used for a broad range of business purposes including refinancing any pre‑existing debt of an eligible borrower
  • loans are for terms of up to 10 years, with an optional repayment holiday period
  • loans can be either unsecured or secured (excluding residential property)
  • the interest rates will be determined by lenders, but will be capped at around 7.5% per cent

What can the SME Recovery Loan be used for?

The intended purpose of the SMRL is to assist small to medium sized businesses in getting back to economic stability. Lenders can offer any suitable product to the borrower except credit cards, charge cards, debit cards or business cards. Loans issued under the Scheme may take any other form of credit providing eligibility criteria are met.

The loan can be used to finance existing loans from eligible lenders, including investment support. This may be done as long as the debt is no more than 30 days in arrears, and the lender has not gone into administration. Loans can also be used to purchase non-residential real estate property (such as commercial property) or for the acquisition of another business.

The loan cannot be used for:

  • 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.

Who is eligible to apply?

The SMRL is available for small to medium sized businesses with a turnover up to $250 million, and adheres to at least one of the following criteria:

  • received Jobkeeper payment between January 4 and March 28 of 2021 (a JobKeeper Scheme‑Backed Loan can only be approved under this eligibility prior to the Scheme Expansion date of 1 October 2021)
  • affected by the floods in eligible Local Government Areas in March 2021 (a Flood affected loan can only be approved under this eligibility prior to 1 January 2022)
  • adversely economically affected by COVID‑19 (a Covid Scheme‑Backed Loan can be approved under this eligibility from the Scheme Expansion Date of 1 October 2021)

Additionally, self-employed individuals and non-profit businesses are eligible. Businesses that have accessed loans in Phase 1 and Phase 2 can also apply for loans under the SMRL.

How do I apply for the SME Loan Recovery Scheme?

Loans backed by the SMRL are available through approved commercial lenders, and the decisions to extend credit, and management of the loan, remain with the lender. The Government is not directly participating in the lending process. The process is relatively simple;

  • Approach a lender
  • Lender makes a decision
  • If a lender declines your application or you are not satisfied with the product offer, you can approach other lenders

Businesses are encouraged to shop around and compare products offered by different participating lenders. The interest rate on loans will be determined by lenders, but will be capped at around 7.5%, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time

Participating lenders are:

  • Westpac
  • ANZ
  • Bank of Queensland
  • Commonwealth Bank of Australia
  • Earlypay
  • Fifo Capital Australia
  • Get Capital
  • Judo Bank
  • Liberty Finance
  • Marketlend
  • Moneytech Finance
  • National Australia Bank
  • Regional Australia Bank
  • Social Enterprise Finance Australia
  • South West Credit Union Co-operative
  • Suncorp-Metway
  • The Mutual Bank
  • TrailBlazer Finance
  • Unity Bank


The SME Recovery Loan Scheme has helped many businesses so far in managing the impacts of the Covid-19 pandemic. Hopefully this guide gives you the key insights you need to start making the most of the SMRL. However, we recommend getting in touch with an accounting professional before acting, to ensure there are no costly mistakes or misunderstandings along the way. At QCA our team of professionals are dedicated to ensuring your business gets every advantage. We already have the knowledge and experience to make the SMRL work for you. Contact the team for more information.