KAYA Founder Speaks to Herald Sun

Kaya Founder Christian Ruggeri speaks to Herald Sun. You can read the full below or click here

New plan to help businesses hard-hit by Covid shutdowns

By Tom Minear and Sarah Perillo

All businesses turning over less than $250m will be able to access government-backed loans of up to $5m in an expanded federal support package to ease the economic pain caused by the Covid-19 crisis.

Josh Frydenberg will on Wednesday unveil the revised recovery loan scheme for small and medium businesses, helping them to refinance debts and make new investments.

Lenders will be able to offer businesses a repayment holiday of up to two years, while the government guarantee will cover 80 per cent of each loan.

“The scheme enables lenders to provide cheaper credit and allows many otherwise viable SMEs to access vital additional funding to get through this crisis, recover and invest for the future,” the Treasurer said.

Since the loan scheme was introduced at the start of the pandemic, it has supported about 74,000 loans worth $6.2bn. It was initially supposed to support $40bn of lending, but take-up has been slower than expected, prompting several changes to the program.

Businesses are currently only eligible if they were receiving JobKeeper when the wage subsidies were switched off in March, or if they were affected by floods.

This will now be expanded to cover all companies with an annual turnover of up to $250m, with loans available through participating lenders until the end of this year.

Council of Small Business Organisations of Australia chief Alexi Boyd said: “This is great news as access to finance is crucial for small business people struggling to reopen, re-engage with our workers and rebuild our businesses.”

The government’s changes were also backed by Australian Banking Association boss Anna Bligh, who said it would mean banks could help more businesses.

“If you’re in need of assistance, talk to your bank. We’re here to help,” she said.

Mr Frydenberg said the loan scheme came on top of targeted business support packages delivered in conjunction with state governments.

“Australians know the Morrison government has had their back during Covid-19 and they know we will continue to have their back as the economy recovers,” he said.

Kaya Health Club owner Christian Ruggeri said his Prahran business had “struggled enormously” during Melbourne’s six lockdowns, especially as gyms were “always the last to reopen”.

“We go from 100 per cent revenue to zero per cent in a matter of hours,” he said.

Mr Ruggeri said the current government assistance “doesn’t even touch the surface”.

“We get about $2800 a week while our operating costs are around $45,000 a week,” he said.

“We’re grateful to be getting something but it’s really nothing.”