The federal government has announced the expansion of the SME Recovery Loan Scheme, an existing scheme allowing businesses with turnovers of less than $250m to access million-dollar government-backed loans.

Previously for businesses to access the SME scheme it was a requirement they had received JobKeeper during the March quarter of 2021 or were a flood-affected business.

But last week, this requirement was removed, with small and medium-sized enterprises (SMEs) that continue to be financially impacted by the coronavirus pandemic now potentially eligible.

Businesses with a turnover of less than $250m will be able to access government-backed loans of up to $5m, with loans available through participating lenders until the end of this year.

Participating lenders will be able to offer businesses a repayment holiday of up to two years, while the government guarantee will cover 80% of the loan amount.