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Small businesses borrowed a further $2.2 billion in June, demonstrating “green shoots” in the economy, says the Australian Banking Association.
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Increased SME borrowing a ‘green shoot’ for the economy, says ABA
24 July 2020
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5 minute read
Small, medium and family businesses have also begun restarting loan repayments again, with the value of SME loan repayments on deferral dropping by more than $686 million last month.
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ABA chief executive Anna Bligh said the new figures showed small businesses were growing in confidence about Australia’s economic future.
“These figures show there are some green shoots emerging in our economy, and that’s a positive sign,” Ms Bligh said.
“There’s a very long road, and plenty of hurdles to clear, but it’s encouraging to see small, medium family businesses slowly regaining some confidence.”
Ms Bligh noted that banks have since provided more than $258 billion in small-business loans, and will continue to extend loan deferrals on a case-by-case basis for those struggling to resume repayments at the end of their six-month deferrals.
Last week, Treasurer Josh Frydenberg announced that the Coronavirus SME Guarantee Scheme would be extended to 30 June 2021 in a bid to help businesses adapt to new COVID-19 conditions.
However, take-up of the scheme has been far from popular, with only 15,600 businesses having accessed loans worth a combined $1.5 billion, compared to the scheme’s planned value of $40 billion.
“Banks are already showing they are prepared to lend to small and medium enterprises so they can get back on their feet. Our banks understand the key role they play in reopening our economy,” Ms Bligh said.
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