Government Guarantee – Phase 2

Phase 1 of government guaranteed loans were designed to assist business with cashflow during the initial stages of the Covid crisis by enabling lenders not to be over zealous with tightening of credit requirements. This initial stage was focused on providing cash to businesses.

Phase 2 in contrast is designed to assist business to grow the economy by investing in equipment purchases. so what does this mean for our clients?

The guarantee does not make it easier to obtain an approval as lenders are required to ensure credit and application parameters are met and suitable (Ensuring that clients have the capacity to repay the loan)

The idea is to encourage lenders to not tighten there credit criteria further by removing some of the overall risk of loss on a particular loan. Further tightening of credit would impact the economies capacity to bounce back.

Lenders do not want to take on loans that are at risk of defaulting nor does the government want to actually have to pay-up on the defaulted loans it has a 50% guarantee on.

So basically we maintain a status quo, having your application presented in the right way to the right lender is imperative. Credit is still tighter than pre-covid and is constantly being adjusted. BRS Finance keeps up to date with all changes on almost a daily basis to ensure our clients get all of the information and the right advice.

If you have any scenario you would like to discuss simply call 1300 730 217 for an open an honest discussion about what options are available to you.

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