How businesses are benefiting from the Government SME Guarantee Scheme

Secure working capital

For many businesses, income was hard to come by during lockdown. Yet they still faced outgoings like rent, operational costs and wages – particularly bridging the gap for employees on JobKeeper.

Then, when lockdown ended, many faced more costs in opening back up, such as re-stocking supplies and re-engaging casual staff. To help cover these costs and fund their reopening, many businesses have used the Government Guarantee Scheme (GGS) 2.0.

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 loan as part of GGS which allowed them to pay their staff and provide 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

In-store foot traffic came to a standstill for many businesses during lockdown. The pause in trading gave some businesses the motivation to invest – be it to purchase a new business or grow their existing one by renovating or expanding. Via the GGS, these businesses have been able to access a low variable rate loan with no loan approval fee or account fees to fund their investment.

One of our business customers, an Australia Post franchisee, has 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 2.0 to fund their deposit, this customer can acquire 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.”

Purchase equipment and motor vehicles

Another key opportunity many businesses have seized is to replace or upgrade equipment and business vehicles. Under GGS 2.0, eligible businesses can borrow money via a low rate loan with no establishment fees and have the ability to tailor repayments to suit their cash flow.

Eligible businesses can also claim an immediate tax deduction for assets up to the value of $150,000 under the Federal Government’s instant asset write-off scheme.

For example, an ANZ business customer which owns a large scrap metal yard had previously always paid cash for their vehicles. With GGS 2.0, however, they are taking advantage of the low rates, low fees and instant asset write-off to finance the purchase of a new truck.

ANZ Banker Nicole Lofthouse says, “By taking out a loan to buy the truck, they are freeing up cash flow – while still being able to take advantage of the instant offset.”

How could the GGS help you?

If you’ve got plans for the future of your business, our affordable, flexible lending could help you tackle whatever comes next. Find out more about our ANZ Next Step Business Solutions – which are eligible loans under the Coronavirus SME Guarantee Scheme.

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