✦ Plain-English Summary

Guarantee of Lending to Small and Medium Enterprises (Coronavirus Economic Response Package) Bill 2020

What it does

The government promised to guarantee bank loans given to small and medium-sized businesses during the COVID-19 crisis. This law makes that happen — it lets the Minister formally back those loans on behalf of Australia, meaning if a business can't repay, the government covers the loss instead of the bank.

Why it matters

Banks were nervous about lending to small businesses during lockdowns and uncertainty. By guaranteeing the loans, the government removed that risk, so banks would actually lend money to keep small businesses afloat when they couldn't operate normally.

Key details

• Who qualifies: Only "SME entities" (small and medium enterprises) can access this — the exact definition gets set out in separate rules the Minister can make.
• Who lends: Banks and other financial institutions approved under banking law can offer these guaranteed loans.
• The money: Any money the government has to pay out under these guarantees comes straight from the federal budget (Consolidated Revenue Fund) — there's no separate appropriation cap mentioned in this bill.
• Start date: The law took effect the day after Parliament approved it, so the guarantee scheme could start immediately during the pandemic response.

Committee Referrals

Senate Standing Committee for the Scrutiny of Bills

No formal division recorded

This bill passed by voice vote — parliament agreed without calling a formal count. A division is only recorded when a member explicitly requests one.

No votes yet.

No votes were recorded for this bill.