Banks prepare free money deluge for business

Monday, 23 March 2020

Demand for business credit for the next few weeks may be the biggest it has ever been and banks will be sorely tested by the avalanche of flaky applications for working capital finance linked to government support measures.

Access to financial support that lowers the cost of business credit applies only to new loans extended from April 1 and advanced no later than the end of September.

Under the Coronavirus SME Guarantee Scheme, the Australian government will provide a guarantee of 50 per cent to SME lenders – banks, non-banks and fintechs – “for new unsecured loans to be used for working capital”.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.