Loophole for SME loans must be closed
The Queensland government has offered loans to small businesses of up to $250,000 – but there is a “serious loophole” that must be closed, notes one principal.
Last week, Queensland Treasurer Jackie Trad announced $500 million will be available in interest-free loans of up to $250,000 to support small businesses. The measure has been introduced, the state government said, so as to keep as many Queenslanders in work as possible.
However, there is a “serious loophole” that needs to be closed, says EAGLEGATE Lawyers principal Nicole Murdoch: only businesses that have been open since 1 July 2017 (i.e. almost three years) can apply for a loan.
“There is no reason this exception should apply and those businesses established since July 2017 are equally hit by the business collapses due to coronavirus restrictions. Why has the [state] abandoned the staff members of those businesses?” she said.
The “survival loans”, Ms Murdoch argued, should apply to all affected Queensland businesses, irrespective of when they began.
The proposed loan restrictions will “undermine solidarity in troubling times”, she continued, as the Queensland government makes determinations about which businesses will survive or not.
“Newer businesses are more vulnerable as they have not had as much time to establish, so many of them will go under because the government does not extend the help to them that it is offering to others,” Ms Murdoch said.
“Lives are at stake here. Not just for business owners but their staff. Sole traders don’t qualify either so what happens to the families of sole-trader families?
“The other issue is that in some industries if you are declared bankrupt you cannot operate. People could not only lose their businesses but they could lose their whole careers, which they have spent their lifetime building. This will lead to more suicides.”
The lifetime community should call on Premier Annastacia Palaszczuk and the state government to open the loans to businesses that were operating as at 1 March 2020 and also to sole traders.
“New businesses, companies and sole traders also need support in these very troubling times. There is no good reason to exclude them from the support package,” she said.
“We all need support and we need to stick together and get through this together. The current approach creates a split environment and almost handpicks who has to fold and who gets to survive. It is not the Australian spirit.
“I urge Premier Palaszczuk to be compassionate and get behind all business in Queensland, not just business that is over three years old.”