CBA was among the key supporters of phase one of the scheme, which debuted in March. The bank was responsible for just under half of all scheme loans approved by value, accounting for $875 million of around $2 billion in loans that were issued to September 30.

CBA loans under phase two will start at 3.5 per cent for secured loans and 4.25 per cent for unsecured loans.

Commonwealth Bank was responsible for almost half of lending in the first phase of the scheme. Peter Braig

Among the key adjustments to phase two of the scheme are an increase in the terms from three years to five years, a rise in the maximum loan size from $250,000 to $1 million and the ability to issue not just unsecured loans but secured loans.

ANZ managing director commercial banking Isaac Rankin said phase two of the scheme “really broadens the appeal for businesses”, highlighting the larger loan sizes and more flexible terms available.

“This should provide greater encouragement for those businesses that have been reluctant to borrow to get back into investment or expansion as their industry starts to recover,” Mr Rankin said.

“Businesses confidence has been one of the major challenges of the current environment and the updated program should make it easier for businesses to regain confidence, especially as they get better visibility of the broader economic recovery.”

Under the scheme the federal government promised to contribute $20 billion out of a total of $40 billion in funding to help SME borrowers reach the other side of the crisis. Take up of phase one of the scheme was slow, with many lenders saying the criteria – which included six-month payment holidays – was too rigid.

Among changes announced by Treasury designed to accelerate loan approvals was the decision to make the payment holidays optional. A 10 percentage point cap on loans above the bank bill swap rate was also introduced in order to prevent lenders gouging customers.