Will Coalition’s new SME COVID loan scheme be another dud?

Wednesday 10 March 2021

According to The AFR, The Morrison Government is set to provide interest-free loans to small and medium enterprises (SMEs) in sectors that have been hardest hit by the COVID-19 pandemic, such as tourism and aviation.

The loans will reportedly be offered via a partnership with commercial banks, which is expected to be similar to the existing SME loan guarantee scheme:

Under the planned more generous interest-free loan scheme, firms that qualify under the strict eligibility criteria will be expected to repay the loans if their earnings recover.

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.