3 options you can explore to get your small business back on its financial feet

As Australia continues to open up following restrictions, our country’s 2.3 million small businesses are now looking for ways to help them recover and grow again – and there are options.

The focus is now on supporting businesses to get back on their feet and help them prosper again. New research from Westpac has revealed that small businesses feel confident about the future, with 85 per cent believing the economy will quickly return to growth as restrictions ease.

A key factor to the sector’s recovery will be the combined support being offered by the Federal and State Governments and Australian financial institutions.

The extension of small business support loans and access to low-rate lending may help small businesses across Australia to recover, and in some instances, position themselves for growth.

Managing Director, Business Lending, Shane Howell, Westpac Group, said: “We want our customers to know we continue to support them while challenges remain. We’ve already helped many small businesses with access to a range of support measures and now we want to help them grow again.”

The below will help you understand what support options are available and what might be right for your business.

1. For businesses in recovery

There’s still time for small to medium-sized businesses to take advantage of the Federal Government’s SME Recovery Loan Scheme, available until 31 December 2021 with loans up to $5 million, with eligibility now expanded to help more Australian businesses impacted by the pandemic.

Back in April, the Federal Government announced the SME Recovery Loan Scheme aimed at supporting businesses to respond to the challenges of the pandemic.

Months later, the need for such assistance hasn’t gone away and the Scheme’s eligibility has now been expanded to help even more businesses impacted by the pandemic. Under the Scheme, lenders can provide access to low interest rate finance to eligible businesses and the government will guarantee a portion of the loan amount.

The scheme is as follows:

• The Government guarantee is 80 per cent of the loan amount
• Lenders can offer borrowers a repayment holiday of up to 24 months*
• Borrowers with a turnover of less than $250 million can access up to $5 million in total over a term up to 10 years
• Loans can be unsecured or secured (excluding residential property)
• Westpac’s SME Recovery Loans offer variable rates from 2.58 per cent, per annum, depending on security offered and whether a repayment deferral applies

Businesses can use the loan for a broad range of business purposes, including business assets, working capital, purchasing commercial property, acquiring another business and in some cases, refinancing existing loans.

2. For businesses in a growth phase

While some businesses are doing it tough, others are beginning to grow again, and they may need access to low rate finance to help them expand.

Westpac’s Shane Howell says, “we remain open for business and have some really competitive offers currently on the table for businesses looking to take advantage of record-low interest rates to get back on their feet and grow.

“This includes access to our low interest rate offer under the Government’s SME Recovery Loan Scheme, which will not only assist businesses feeling the impact of the pandemic, but also help those preparing to grow.”

Two examples of growing businesses are SCD Remanufactured Vehicles and Sans Drinks. Over the past 12 months, Queensland-based muscle car importers SCD Remanufactured Vehicles have seen a spike in demand for heavy-duty vehicles that can tow caravans for Australians taking domestic road trips, while overseas borders remain closed.

With overseas shipping restrictions and delays affecting their supply, SCD took out a government-backed business loan with Westpac and was able to smooth over a bumpy period and maintain growth, more than doubling their team from pre-COVID. Even with the recent lockdowns, the business continues to see high demand.

Watch video: How SCD Remanufactured Vehicles has grown during the pandemic. Post continues below.

Irene Falcone, founder of non-alcoholic drinks online store Sans Drinks, used her Westpac business loan to start Australia’s first alcohol-free bottle shop in Sydney’s Northern Beaches in May. While the recent lockdowns in NSW forced Irene to close the doors of her new shop temporarily, demand for her online services were still as hungry as ever.

“We have had so many issues with selling out and just not being able to get enough stock,” Irene told Kochie’s Business Builders.

The loan has helped Irene with purchasing overseas stock in bulk to ensure the business had a surplus of product.

Watch video: The story of Sans Drinks. Post continues below.

As well as expanding the low rate offer for SMERL loans, Westpac also recently launched its lowest fixed rate business loan in years and is offering incentives like business loan restructuring with no added fees, reduced or deferred payments on asset and equipment finance, and eligible business loans.

“Accessing finance can play different roles at different stages of your business journey. It’s important to speak with your banker who can get to understand your growth ambition and what lending product might be right for you,” says Westpac’s Shane Howell.

“For certain industries, such as healthcare or commercial and residential property that might require more unique lending products, we have teams of specialist bankers who can help with tailored solutions to meet specific needs.”

3. For all businesses looking to plan ahead

If the pandemic has shown us one thing, it’s that we need to plan and have contingencies in place.

“We’ve found from speaking with our customers that their core priority lies in keeping their existing customer base happy and returning. This is helping businesses to stabilise their revenue and cashflow,” Howell says. “At the same time, we’re seeing businesses recognise the need to diversify their offerings to ensure they have options for future growth, which is also helping them to become more resilient.”

From his observations working with Westpac business customers, Howell says he’s “impressed to see how many businesses have been able to look at their customer needs and adapt to find new revenue streams.”

“Australian businesses have continued to show remarkable resilience and as the vaccination rates continue to rise, we’re encouraged that the economy will bounce back,” he adds. “We remain optimistic about the future and are committed to supporting Australian businesses to reopen and grow.”

Get in touch with Westpac for help with business loans or check your eligibility for an SME Recovery Loan today.

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

This content is brought to you by Kochie’s Business Builders in partnership with Westpac.

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.

Conditions, credit criteria and fees and charges apply, credit provided by Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australians credit license 233714

Feature image: Irene Falcone from Sans Drinks.