CANBERRA, AAP – Australia’s big banks have been quick to jump on board an expanded federal loan scheme that will offer loans of up to $5 million for businesses with a turnover of less than $250 million.

Treasurer Josh Frydenberg announced small and medium sized firms would no longer be required to have received JobKeeper wage subsidies or been affected by floods to access the program.

The treasurer said small businesses were desperate with ongoing coronavirus lockdowns putting owners under extreme pressure.

“They’re despondent,” Mr Frydenberg told the Nine Network on Wednesday.

“Many people have their life savings on the line through their small businesses, and indeed in many cases their homes.”

The government will guarantee up to 80 per cent of the loans, which will be available through participating lenders until the end of the year.

Repayment holidays of up to two years will be allowed.

Loans can be used for a broad range of business purposes, including supporting investment and refinancing pre-existing debt.

“We’re obviously seeking to give them the best possible interest rate, lower than what they otherwise may have found in the market,” Mr Frydenberg said.

Commonwealth Bank, the nation’s largest retail bank, said it will be encouraging businesses to take advantage of these support measures.

“The impacts of the pandemic are widespread and diverse across businesses and industry sectors,'” CBA’s group executive for business banking Mike Vacy-Lyle said

“At CBA we are firmly committed to supporting the SME sector, which is so vital to Australia’s economic recovery.”

National Australia Bank group executive for business and private banking Andrew Irvine said the SME recovery loan scheme is a good option for businesses who need additional capital at this time.

“Expanding the eligibility criteria is a positive step,” he said.

Westpac CEO Peter King said the scheme will help small businesses to keep going until the lockdowns are lifted and the economy is back on track.

“We have already helped hundreds of small businesses through this difficult time and where needed provided access to three-month loan deferrals,” Mr King said.