COVID-19:
Funding update
With the uncertainty and economic challenges surrounding the current pandemic, we understand that SMEs need financial support or relief over the coming months. Our role as a lender of choice for small business is now more critical than ever.
As you may know, OnDeck has been selected by the Australian Government as one of the five non-bank lenders to participate in the Coronavirus SME Guarantee Scheme. We’re currently assessing what our participation could look like.
The loans that we can offer under the Scheme might not be suited to everyone (view our FAQs below for more information), so we’re also working with our finance partners to consider solutions that may be appropriate in the current environment and, most importantly, for our nation’s small business owners.
We’ll keep you updated as we continue to create solutions for your clients, our customers, during the COVID-19 crisis. In the meantime, please continue to refer to our latest product parameters on our Partner Resources page under ‘Product Documents’.
FAQs - Coronavirus SME Guarantee Scheme
No, under the Scheme, loans can only be new loans that do not refinance existing debt to the existing or other lenders.
The total amount of an SME’s loans supported by the Scheme (including funding from other participating lenders) cannot be more than $250,000. This means that an SME can have up to a total of $250,000 of loans sourced from any participating lenders.
Under the Scheme, other than personal guarantees which can be taken as security, the Government will only guarantee loans issued by a participating lender where the lender has not exercised or enforced any security rights they may contractually have, i.e. no PPSR, GSAs or caveats.
Yes, loans issued under the Scheme must have a 6-month payment holiday. What’s important to keep in mind, however, is that this is not an interest-free period. The majority of participating lenders may accrue interest (which is permitted) against the outstanding balance of the loan during the course of the repayment holiday.
This may mean that while the interest rate is lower, the total cost of the loan may be higher for customers.
Yes, please visit the Government’s website at www.treasury.gov.au/coronavirus/sme-guarantee-scheme, which is updated from time to time.
Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at 20 April 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.