With salon owners holding their breath to find out what support would be made available when JobKeeper ends on March 28, it’s now been revealed that the federal government has created a loan scheme for small and medium businesses, offering loans of up to $5 million.

The business recovery loan scheme will see 80% of the loan guaranteed by the government, and 20% by participating banks.

Treasurer Josh Frydenberg said it will businesses that are “continuing to do it tough” with “proportionate, timely, scalable and targeted assistance”.

“The expansion and extension of the loans will back businesses that back themselves, and will help businesses who continue to do it tough build a bridge to the other side of the crisis and keep their staff employed,” Mr Frydenberg said.

To be eligible for a loan, salons must have received JobKeeper between January 4 and March 28, and have a turnover of no more than $250 million.

With terms of up to ten years, and the options of a repayment holiday period, loans can be used to purchase commercial property and to acquire another business.

However, they cannot be used to support investment, refinance pre-existing debt, including debt from the previous SME guarantee scheme, or to purchase commercial property. Loans cannot be used to buy residential property, financial products or lease, rent, hire or purchase existing assets that are more than half-way into their effective life.

While interest rates will be dictated by the lenders, the government has capped it at 7.5%, and has also highlighted that there will be some flexibility for interest rates on variable rate loans to rise, if market interest rates increase in the future.

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