Everyone has been asking if the loans can be used for refinancing or buying new equipment and the answer is NO!
But I am happy to finally let you all know that the applications are now open for the Queensland State Government’s COVID-19 Jobs Support Loans. Let me rip these loans apart for you, and full disclosure, I hate the thought of my clients going into debt and wearing the cost of this pandemic so please, please get some advice before you consider this option.
The loan features are as follows:
- $500 million on offer under the scheme.
- Maximum loan amount for these loans is 50% of your operation’s annual wage expense (to a maximum of $250,000).
- No repayments or interest charged for the first year.
- Plus two years interest only (so principal and interest repayments will start in the third year).
- A discounted 2.5% fixed interest rate.
- 10-year term of loan.
- Unsecured up to $100,000. Loans over $100,000 will need a General Security Agreement (which is a general charge over business assets). No security is taken over your family home!
- You can apply more than once but in total you cannot borrow more than the maximum loan amount.
- Business owners without employees may also be eligible (provided they work hours in the business equal to at least one full time equivalent employee (35 hours per week).
- Open until 25 September 2020 or until funding is fully committed.
To be eligible, loan applicants must:
-Be an eligible business which holds an ABN and is registered for GST.
- Have one or more equivalent full-time employees in Queensland.
- Have operated the business since 1 July 2017.
- Have suffered a loss as a result of COVID-19.
- Be viable under normal business conditions.
- Be able to service the loan under normal business conditions.
- Intend to continue operations after receiving the loan.
- Intend to use any surplus liquid reserves or normal credit sources up to normal credit limits, in conjunction with the loan to continue operations.
You will need to provide the following information when applying for the loan:
- Business financial statements for the 2017-18 and 2018-19 financial years.
- Personal taxation returns for 2017-18 and 2018-19.
- Bank account information.
- Australian Taxation Office Integrated Client Account Statements.
- Aged list of debtors and creditors at time of application.
- Applicant information.
- Organisation Constitution or Rules of Association and Certificate of Incorporation (if applying as a non-profit organisation).
- Trust deed (if applying as a trust).
How loan may be used
The loans may be used to meet working capital expenses, for example:
- Paying employee wages.
- Paying creditors and existing business loan and equipment finance payments.
- Paying rent and rates.
- Buying goods (including fuel) for the purposes of carrying on the business..
The loan cannot be used for:
- refinancing existing business loans or equipment finance;
- purchasing new equipment or other assets.