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How businesses benefited from Government Guarantee Schemes

ANZ Financially Ready

2022-07-11 00:00

The global pandemic has had a huge impact on Australian businesses. From restaurants to retailers, gyms to hairdressers, many have had to close their doors for months. Others felt the ripple effect as the economy slowed.

The Australian Government’s SME guarantee schemes have helped many of them make it through a challenging time.

For many businesses, income has been directly impacted by lockdowns. Yet they still face outgoings like rent, operational costs and wages. As restrictions change, many businesses may face more costs in opening back up, such as re-stocking supplies and re-engaging casual staff.

In 2020, many small businesses were helped by previous phases of the Government Guarantee Scheme (GGS) to bounce back. Here’s how they did it.

Secure working capital

One ANZ customer, furniture design store DesignByThem had just moved into a new showroom and warehouse when the pandemic struck. They suddenly found themselves sitting still. Their biggest concern was how to retain a team of seven full-time and three casual staff.

To keep their business running, they worked with ANZ to secure a GGS loan which allowed them to pay their staff and provided an overdraft to continue to purchase stock. Owner Sarah Gibson said this was extremely beneficial to the business.

“The extra money has been really helpful,” Sarah says. “It was good to have the assurance that if we used it to purchase items, we had some extra stretch in our cash flow.”

By using GGS to weather the storm until growth returned the DesignByThem team are now in a healthy position and have their sights set on a strong, international future.

“We have been working with a team of interior designers in California, supplying Australian-designed and produced furniture to Spotify, Netflix, Nike and Google. It’s really exciting,” Sarah says.

Invest in the business

The pause in trading gave some businesses the motivation to invest – be it to purchase a new business or grow their existing one. Via the GGS, these businesses were able to access a low variable rate loan with no loan approval fee or loan account fees to fund their investment.

One of our business customers, an Australia Post franchisee, experienced a significant increase in business during the pandemic due to the sudden boom in eCommerce. ANZ banker Kamalaker Kande worked with the customer to help them access funds for a deposit on a commercial property – which they wanted to purchase as an investment, as their current business premises was not for sale.

“By using the GGS to fund their deposit, this customer acquired the property with minimal contribution from their own pocket,” Kande says.

“They were very grateful for the information and assistance received about the scheme and how it opened up the possibility for them to pursue this new opportunity.

The Australian Government SME Recovery Loan Scheme is now closed to new applications.

How businesses benefited from Government Guarantee Schemes
Business specialist
ANZ Financially Ready

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This is general information only, so it doesn’t take into account your objectives, financial situation or needs. ANZ is not giving you advice or recommendations (including tax advice), and there may be other ways to manage finances, planning and decisions for your business.

Read the ANZ Financial Services Guide (PDF 179kB) and, if applicable, the product Terms and Conditions. Carefully consider what's right for you, and ask your lawyer, accountant or financial planner if you need help. 

Any tools, checklists or calculators produce results based on the limited information you provide so they are an estimate or guide only. As they are incomplete, they are not a substitute for professional advice.

Terms and conditions, fees and charges, and credit approval and eligibility criteria apply to ANZ products.

The Interest rates are current as at 15 October 2021 and are subject to change. 

Interest rates on variable-rate loans are subject to change throughout the term of the loan. 

All lending provided by ANZ under the Australian Government SME Recovery Loan Scheme is subject to ANZ's normal credit approval criteria. Terms and conditions and Fees and charges apply.  For information and eligibility rules please visit Government SME Recovery Loan Scheme.