Small Business Guaranteed Loans: Status and Alternatives

Small business guaranteed loans under the COVID-era government schemes are closed to new lending, but Export Finance Australia still provides guarantees for eligible export finance. As at 3 October 2026, the Small and Medium Enterprises (SME) Guarantee Scheme and SME Recovery Loan Scheme are closed.

A government guarantee supports the lender’s risk. Your client still has to repay the loan.

Current Status of Government-Guaranteed Business Loans

The SME Recovery Loan Scheme closed for new loans on 30 June 2022, and both earlier SME Guarantee Scheme phases are also closed. Treasury’s scheme page confirms the Recovery closure as at 3 October 2026.

Closure to new lending doesn’t cancel an existing scheme loan. Its loan agreement continues to govern repayments, interest and any agreed changes. A new application or refinancing request today needs an available facility, even when the original debt came from a government-backed scheme.

Export Finance Australia Guarantees

The export guarantee programme remains open as at 3 October 2026. Business.gov.au lists applications at any time, with guarantee amounts starting at $350,000.

This route suits an Australian company with at least two years’ trading and annual turnover over $250,000. It needs a valid export contract or work supplying an exporter, plus a shortfall in bank finance without additional support. The guarantee supports finance from the client’s bank, which receives the repayments.

Your client and their bank can approach Export Finance Australia about a guarantee. This is targeted export support, so a domestic business borrowing for unrelated working capital doesn’t qualify on that purpose alone.

Government-Owned Lenders and State Loans

The following lending programmes also accept applications as at 3 October 2026. They provide loans directly and have their own eligibility tests.

Programme and owner	Who it fits	Main conditions
Small Business Export Loan, Export Finance Australia	Businesses funding export contracts or export growth	$20,000 to $350,000, at least two years’ trading and annual revenue between $250,000 and $10 million. Export-purpose requirements apply.
Farm Investment Loan, Australian Government Regional Investment Corporation	Eligible farm businesses recovering from severe disruption or strengthening their operation	Up to $2 million. Requires repayment capacity, long-term viability and security. At least 50% of total debt must initially remain with a commercial lender.
Sustainability Loan, Queensland Rural and Industry Development Authority	Existing Queensland primary producers and commercial wild-catch fishing businesses	Up to $1.3 million for eligible sustainability investment, with security. Complete applications are assessed until 30 June 2027 or the lending allocation is fully committed.

Business.gov.au confirms the export loan is open. Export Finance Australia’s Small Business Export Loan terms explains that property security isn’t required, although director guarantees apply. Export-revenue requirements depend on the funding purpose.

The Regional Investment Corporation’s Farm Investment Loan criteria require financial need following an external business impact over two consecutive years. The business must sell mainly into interstate or overseas supply chains, or plan to do so. Its commercial lender must support the proposed loan.

Queensland’s Sustainability Loan page marks the programme open. It funds eligible improvements to an existing primary production or commercial fishing business. Neither farm programme is a general replacement for the closed COVID business guarantee schemes.

How the SME Guarantee Schemes Worked

The government guaranteed a share of eligible lending to participating lenders, reducing their potential loss if a borrower defaulted. The lender advanced the money and assessed the application. The guarantee didn’t give the business a grant or reduce the amount it owed.

These are historical settings, not offers available for a new application.

Scheme and lending period	Government guarantee	Borrowing cap and maximum term	Historical eligibility
SME Guarantee Scheme Phase 1, 23 March to 30 September 2020	50%	$250,000 per borrower, up to three years	Small businesses, including sole traders and not-for-profits, within the $50 million annual turnover threshold. Unsecured working capital loans.
SME Guarantee Scheme Phase 2, 1 October 2020 to 30 June 2021	50%	$1 million per borrower, up to five years	Annual turnover below $50 million in 2019-20 or expected below it in 2020-21. Broader business purposes and secured or unsecured lending.
SME Recovery Loan Scheme, April to December 2021	80%	$5 million per borrower, up to ten years	Turnover up to $250 million. Early eligibility covered qualifying JobKeeper recipients and March 2021 flood-affected businesses. From October, eligibility expanded to businesses economically affected by COVID-19.
SME Recovery Loan Scheme, 1 January to 30 June 2022	50%	$5 million per borrower, up to ten years	Turnover up to $250 million and adverse economic effects from COVID-19, including eligible self-employed and non-profit businesses.

Treasury’s Phase 1 page records the original unsecured working capital settings. Its Phase 2 rules define the turnover test and permit security other than residential property. The 2022 Recovery fact sheet sets out the final phase’s eligibility and lending terms.

The Recovery lender guide separates the earlier JobKeeper and flood routes from the later COVID expansion. For an existing Recovery loan, the guarantee percentage depends on when approval became unconditional. Treasury explains this timing rule, which can differ from the date the agreement was signed.

The Borrower Still Owed the Whole Loan

A hypothetical $100,000 loan under a 50% guarantee still created a $100,000 borrower debt, plus contractual interest and charges. The government guarantee protected part of the lender’s eligible loss under the scheme rules. It didn’t mean the client could repay half the debt.

Lenders still applied their credit policies, including repayment assessment. Meeting a scheme’s turnover or purpose test never guaranteed approval. A director guarantee, where required, was a separate obligation from the government’s guarantee.

Answering the Client Who Asks for a Guaranteed Loan

Give your client the closure date, explain any relevant export route and move to the funding need. You can say:

The COVID small business guarantee schemes are closed to new loans. The Recovery scheme closed on 30 June 2022. Export Finance Australia still supports eligible export finance. What will the money pay for, how much do you need and over what term?

Before choosing an alternative, collect the facts that decide repayment capacity and security.

• Record the borrowing entity, ownership and directors, along with trading history and annual turnover.
• Identify the exact purpose, amount, deadline and expected useful life of any asset being purchased.
• Gather recent financial statements and bank statements, with a forecast showing when cash arrives and repayments fall due.
• List existing loans, overdrafts and lease repayments. Include tax debts and payment arrangements.
• Record available residential or commercial property security, its existing debt and the owners’ willingness to mortgage it.
• Review the directors’ personal income, assets, debts and existing guarantees. Establish who would give any additional guarantee.
• For export or farm programmes, collect the contract or operational evidence that establishes programme eligibility.

Use a business loan cash flow forecast to test repayment timing against expected receipts. A profitable business can still lack cash on the day a repayment falls due. Match the facility to that pattern before choosing the longest term or largest limit.

Secured, Unsecured and Guarantor Alternatives

Compare property security, unsecured credit and personal guarantees separately because a single business loan can combine them. A director guarantee can support either a secured or unsecured facility. It doesn’t create a government-backed loan.

Structure	Cost and speed	Limit and term	Risk to owners
Loan secured by residential or commercial property	Security can support a lower rate. Valuation and mortgage documentation can add time and costs.	Available equity and repayment capacity constrain the limit. Property security can support longer terms.	The lender can enforce its mortgage if the loan isn’t repaid. Business borrowing exposes the pledged property.
Unsecured business loan	Often carries a higher rate. An eligible online application can receive a faster decision without a property valuation.	Product caps and cash flow constrain borrowing. Terms can be shorter than property-backed lending.	The company still owes the debt. A personal guarantee can expose the director’s assets even without an upfront property mortgage.
Loan with a director or third-party guarantee	Cost follows the underlying facility. Guarantor assessment and documentation can add time.	The guarantee supports the application, but the lender still assesses the business and sets its limit.	The guarantor can become liable under the signed guarantee. Any pledged security adds asset risk.

As at October 2026, Commonwealth Bank’s secured and unsecured loan explanation describes unsecured rates as often higher. Its BetterBusiness Loan page lists unsecured limits up to $250,000 and a maximum seven-year term.

National Australia Bank (NAB), as at October 2026, lists QuickBiz loans up to $250,000 over five years. These are product examples, not market-wide limits.

A Personal Guarantee Is a Separate Promise

For company borrowing, include director guarantees in the assessment even when the facility is described as unsecured. A personal guarantee is the director’s promise to meet the obligations covered by its terms if called upon. It doesn’t replace the company’s repayment obligation.

ANZ, as at October 2026, states that its unsecured business loans can require a personal guarantee from directors. Westpac’s business lending guide, as at October 2026, describes third-party guarantees supported by the guarantor’s assets. These examples show why you must assess the actual guarantee and security requirements for the proposed facility.

For a client, the distinction is practical. An unsecured offer describes the loan’s collateral requirements, while a personal guarantee can still create personal exposure. Use the business loan guarantor guide for the evidence and process, and arrange independent legal advice before a guarantor signs.

Match the Facility to the Purpose

Equipment finance can fit a defined vehicle or machinery purchase because the asset can secure its own funding. For a business waiting on eligible customer invoices, invoice finance can bring receipts forward. An overdraft can fit recurring short-term cash gaps, with interest charged on the amount drawn under the facility’s terms.

In a hypothetical case, a client needs $80,000 for a delivery vehicle and $20,000 to bridge seasonal receipts. Assess asset finance for the vehicle and a working capital facility for the temporary gap. A single long-term property loan would also expose property to the short-term borrowing.

Use the business finance guide to compare purpose-specific facilities and the unsecured business loan guide for deeper cash flow assessment. Compare total interest and fees over the expected borrowing period, including security costs and any early repayment charge.

Record the Advice and the Date Checked

Record the availability check and the reason for the facility recommendation so a later broker can understand the client’s options. Keep the official source URL or saved page with the file note.

For example, a file note dated 3 October 2026 can record:

• Treasury confirms the Recovery scheme closed for new lending on 30 June 2022.
• Export Finance Australia guarantees remain open, but the client’s proposed domestic purchase has no export link.
• The client needs $80,000 for a vehicle and $20,000 for a seasonal cash gap.
• Asset finance and an overdraft are considered alongside unsecured and property-backed term loans.
• The proposed facilities match the purchase and cash timing. Keep the forecast and repayment calculation with the recommendation. Record owner exposure before recommending specific products.

If your client returns for a later application, recheck the official programme pages and record the new date. Government programmes can change eligibility or close when funding is committed. Obtain current facility terms before the client proceeds, and keep any existing scheme loan’s terms distinct from the new borrowing.