Business lender ScotPac has allocated A$100 million for a “bounce back” finance offer with terms that include an interest-free period for the first three months.

ScotPac hopes to capitalise on unmet demand for the government’s SME Loan Recovery Scheme, which ends next month.

Under the government scheme, where the government guarantees 80 per cent of the loan amount, lenders are allowed to offer borrowers a repayment holiday of up to two years and loans may be used to refinance existing debt.

ScotPac chief executive Jon Sutton said these repayment holidays involved a deferral of interest payments.

“Ours is a genuine offer of three months interest-free,” Sutton said.

The borrowing limit for each customer is A$1 million and the offer is available until April next year or the allocation is used up.

Finance on offer is trade finance and invoice finance.

“SMEs coming back out of the latest lockdowns need working capital to get going. With three months interest free they can afford to invest in their businesses while their revenue gets back to normal levels,” Sutton said.

He said that while many small businesses are reluctant to borrow, there is strong demand in some sectors like food delivery businesses.