Covid has not left us.
It might not scare us as much and it no longer front-page news but it is still out there. As a medical professional you probably don’t need reminding.
Most of the business incentives have gone too. JobKeeper kept many medical businesses alive and grants were taken up at world record speeds. But Australia seems to have moved on from these incentives.
There is still however one that is still in play. But you need to be quick – its about to end soon.
It’s the Government Covid Loan.
The interest rate is OK. But the main benefit is that you do not need to provide any security. And that makes not only the interest rate attractive but asset protection attractive too.
Why?
Well, if your business cannot repay the loan then at least you do not lose your house. And if you have a nice house, as most medical professionals do, then keeping it away from creditors hands is about as attractive as you get.
I met up with Chris from Fit Finance. He told me these loans are great if you need finance and unwilling or unable to offer security.
How do you apply?
You must qualify first:
From 1 January 2022
- You must be adversely economically affected by the Coronavirus Pandemic – this could be anything from stock issues to shortage of staff.
- You must have a valid ABN and
- Turnover of up to $250 million.
In other words most businesses will be eligible.
What can you use the loan on?
• Loans must be used for business purposes only, with limited exceptions:
- Loans cannot be used for the purchase of residential real property, the purchase of financial products or lending to an associated entity
- Loans cannot be used to purchase commercial property for investment purposes unless the the main activity of the entity is property investment.
- Loans cannot be used to lease, rent, hire or hire purchase existing assets that are more than half-way into their effective life.
- Loans can be used to purchase non-residential real property (such as commercial property) or for the acquisition of another business.
• Loans may be used to refinance any pre-existing debt of an eligible borrower, with some exceptions:
- Loans secured by residential property cannot be refinanced into a scheme-backed loan
- Loans that are more than 30 days in arrears, as at the application date, cannot be refinanced
- Borrowers who have entered external administration, are insolvent, or bankrupt will not be allowed to refinance existing debts into a scheme-backed loan
• It is possible to vary or restructure loans if they continue to meet eligibility criteria (including the maximum loan term) and do not increase the loan limit after approval.
Other Things You Need to be Aware of:
- Loan term can be from 3 – 10 years
- Rates vary from 3.63% (<5 years without repayment deferral) to 5.43% (<10 years with 12mth repayment deferral)
- Security is on the borrower plus unsupported directors guarantee/s (limited in line with loan).
If you would like to know more about Government backed Covid loans, contact the office or contact Chris directly at chris@fit-finance.com.au or visit their website: https://fitfinance.com.au
