The Commonwealth Bank of Australia (ASX: CBA) share price is down around 0.6%. Australia's biggest bank released an update about the government scheme loans for small and medium businesses to help them with the impacts of COVID-19.
Over the last year and a half, there have been huge impacts on various parts of the Australian economy. Government stimulus has been there to help households and employees.
But some businesses have needed more support than the cash support that was given by the federal and state government.
The government scheme loans
CBA gave an update today to say that more than 20,000 Australian businesses have received more than $1.98 billion in funding support made available through the Commonwealth Bank's government-backed guarantee loan scheme to help them manage the impacts of the pandemic, recover and invest for the future.
The original scheme was started on 22 March 2020. That was essentially the bottom of the COVID-19 crash, when the CBA share price fell below $60.
The scheme has seen various developments since inception. This scheme was recently changed to allow any business impacted by COVID-19 with annual turnover of less than $250 million to borrow up to $5 million for up to 10 years at record low rates.
This help has been given to various industries over the past 18 months. CBA said the loans gave smaller businesses vital cashflow and peace of mind. Some of the businesses have used the cash to adapt to the current conditions. For example, they may have shifted online, or expanded the operations. Those businesses that saw increased demand may have allowed them to employ more staff.
The CBA gave an example of a meat wholesaling and retailing business which pivoted to online and allowed consumers to buy restaurant quality meat as well as the regular butcher products. Since then, it has done over 100,000 deliveries and now delivers to 92% of Australian postcodes.
The CBA executive general manager of business lending, Clare Morgan, said:
The impacts of the pandemic have been really varied for different businesses and different sectors, many require access to credit to help them through this period, and some are looking for additional capital to grow, invest and expand through recovery.
We plan to play a leading role in the expanded SME Recovery Loan Scheme as we've done through the various phases of the scheme and encourage businesses to speak with us about what might be suitable for their business needs.
What else may be impacting the CBA share price?
It's true that CBA shares are down around 0.6%.
However, the overall ASX share market – the S&P/ASX 200 Index (ASX: XJO) – is also down by 0.54% to 7,397 points. So, CBA shares have largely tracked what the market has done today.
The bank has seen considerable growth in the shorter-term. In 2021 it has gone up by 20% whilst. CBA shares have gone up 55% over the past year.
