Government Small Business Loans: A Short Guide

Government small business loans are offered by the Federal Government to businesses or people meeting certain criteria. For example, the Australian Federal Government offers loans to farmers and businesses in drought-affected areas. They also offer loans to increase Australian exports.

State government small business loans are set aside for businesses and people who reside in particular states. For example, the ACT Microcredit Loan Program is only available to ACT residents.

Let’s look at a few of the types of government small business loans offered to better understand how they work.

These types of loans are offered by state and federal governments and are designed to help Australian businesses grow with the goal of developing the economy. These are state-based initiatives only open to residents who reside in states that are offering the loans.

Examples include:

• ACT Microcredit Loan Program – this program provides interest-free small business loans of up to $3,000 or low-interest loans up to $10,000 to low income earners looking to start or expand an existing business. The funds are to be used to purchase materials or equipment to grow the business. Business owners in the program can also access services including business skills growth, business advice, peer support and networking events. Applicants must have a health care card and an annual family income no higher than $75,000.
• Accelerating Growth Loans NSW – these provide emerging fast-growth SMEs with loans ranging from $200,000 to $250,000 when traditional lenders are unable to assist. To qualify for this loan, a business needs to have at least five employees and plan to create at least 10 new FTE jobs in certain urban areas of NSW.
• AgriGrowth Loan Scheme TAS – this provides Tasmanian farms and agri-businesses with low-interest loans of up to $1.5 million to develop the agricultural sector. To qualify, the farm or business must have a business project that contributes to the Tasmanian Government’s Agrivision 2050 plan.
• AgriGrowth Loan Scheme TAS – this provides Tasmanian farms and agri-businesses with low-interest loans of up to $1.5 million to develop the agricultural sector. To qualify, the farm or business must have a business project that contributes to the Tasmanian Government’s Agrivision 2050 plan.

Export loans are designed to develop Australian export businesses. Most are federal initiatives that require a business to meet certain criteria. Examples include:

• Efic Export Line of Credit – Provides access to a line of credit to SME exporters, as well as companies in an export supply chain, to support export contracts when a traditional lender can’t help. A business must have at $250,000 in annual revenue and been established at least two years to qualify.
• Efic Small Business Export Loan – Provides loans of between $20,000 to $350,000 to SME exporters to cover up to 80% of the costs to secure an export contract or purchase order with an overseas buyer. To qualify, a business needs to have between $250,000 and $10 million in revenue and have been in business for at least two years.

These are government small business loans offered to people and business affected by natural disasters or other events beyond their control. Most recently, these have included drought loans for farmers and agribusinesses. Examples include:

• Drought loans – offered by the Commonwealth Government, these provide farm businesses with loans of up to $1 million to help them prepare for, manage through and recover from droughts. Farmers must be in drought-affected areas to qualify for these loans.
• Drought Assistance Fund NSW – provides interest-free loans of up to $50,000 to NSW primary producers to assist with the costs of implementing systems and practices to enhance the sustainability of their farms. To qualify, you must have a farm business owner in NSW.

If you think you might qualify for a government small business loan, a good place to begin looking is the business.gov.au Grants and Assistance page. Here you can search for government business loans that meet your needs. You can also check the criteria outlined to ensure that you qualify.

If you have questions on getting a business loan, visit Frequently Asked Questions on How to Get a Business Loan.

For more details on small business grants, see Small Business Grants to Boost Your Growth.

The Commonwealth and state governments have responded to the COVID-19 pandemic with a range of grants and support programs.

Check out Moula’s State-By-State Guide to COVID-19 Lockdown Support and a Quick Guide to the NSW COVID-19 Business Support Package.