Online lender Prospa Group Limited (ASX: PGL) has received access to the Australian government’s SME Guarantee Scheme to support small businesses impacted by the COVID-19 pandemic. The Fintech believes it is uniquely placed to implement the Government’s initiative.
The Coronavirus Small and Medium Enterprises Guarantee Scheme will support up to $40 billion of lending to SMEs (including sole traders and not-for-profits). Under the plan, the Government will guarantee 50 percent of new loans issued by eligible lenders to SMEs. The plan will be available for new loans made by participating lenders until 30 September 2020.
The Scheme is designed to support smaller businesses who are considered by the lender as being viable in the longer-term. Prospa has received an allocation of up to $223 million which can be applied to all eligible new lines of credit and loans issued by Prospa between 14 April 2020 and 30 September 2020.
This guarantee allows Prospa to provide eligible small businesses with:
- Access to up to $250,000 in unsecured funding for up to 3 years, quickly and easily, with no upfront fees; and
- A 6-month repayment holiday with interest to be capitalised at the end of the 6-month period.
“It’s fantastic to see the Government understands what small businesses need right now to survive. Prospa has always focused on small businesses and access to this Scheme will empower us to support thousands of small businesses during this difficult time. The more access small businesses have to working capital, the better it is for the economy. The Government’s response has been swift and considered, and we look forward to doing our part in providing essential funding to the small business community.”
Since platform launch, Prospa has originated over $1.4 billion in loans across Australia and New Zealand.