INDEPENDENT NEWS

Extended Loan Scheme Keeps Business Afloat

Published: Sun 5 Jul 2020 02:14 PM
Small businesses are getting greater certainty about access to finance with an extension to the interest-free cashflow loan scheme to the end of the year.
The Small Business Cashflow Loan Scheme has already been extended once, to 24 July. Revenue and Small Business Minister Stuart Nash says it will be further extended to 31 December, to give assurance that business support remains available over coming months.
“The decision to extend the interest-free loan scheme is designed to give confidence to our smallest businesses and keep up the momentum of recovery. It shows the Government is continuing to back them in the post-lockdown environment,” Stuart Nash said.
“It will ensure businesses aren’t under pressure to decide quickly whether the loan scheme is right for them. Extending the scheme will give businesses owners more time to carefully evaluate their situation as our economy keeps opening up.
“The interest-free loans came at just the right time. Businesses with temporary cashflow issues during the lockdown are now taking advantage of one of the most open economies in the world. More than 1,500 borrowers have already repaid almost $4.9 million.
“We want to protect jobs and keep as many businesses afloat as possible. The loans are a useful complement to the wage subsidy. They provide businesses with cashflow support for non-wage costs, while the wage subsidy ensures they keep staff on the books.
“I’m particularly pleased that micro businesses, with between one and five staff, have made good use of the scheme. Around 80 per cent of firms who applied have one to five employees, and just over 90 percent have 10 or fewer staff.
“As at Friday 3 July, 90,485 small businesses had applied for more than $1.51 billion of loans since 12 May. The average value of each loan is modest, around $16,700. But it is much needed working capital to help in a tight spot.
“The loans are a backstop for small and medium businesses who are not able to get the cashflow support they need from banks. Many don’t have a well-established relationship with their bank, or the bank might ask them to put up their house as collateral. That just doesn’t work for these firms.
“The firms are diverse, and most applications are from industries in construction, accommodation, restaurants and cafes, retail trade, transport and manufacturing.
“The loan conditions remain the same. I urge business owners to talk to their bookkeeper, tax agent or accountant, or log onto the MyIR portal, to ensure they take advantage of this government support,” Stuart Nash said.Terms and conditions – overview
· Loans are interest free if repaid within a year.
· After one year the interest rate is 3%, from the date of draw-down, for a maximum term of five years.
· Repayments are not required for the first two years.
· SMEs employing 50 or fewer staff, who were eligible for the original wage subsidy, are eligible to apply for the one-off loan.
· The loan amount is $10,000 plus $1,800 per equivalent full-time employee, up to a maximum amount of $100,000.
More information here: www.ird.govt.nz/covid-19/business-and-organisations/small-business-cash-flow-loan

Next in New Zealand politics

Adjournment Debate: Speaker Trevor Mallard
By: Hansard
Vaping Legislation Passes
By: New Zealand Government
On The Virtues (and Fluffed Opportunities) Of The Operation Burnham Report
By: Gordon Campbell
How Judith Collins stopped the bleeding
By: Horizon Research Limited
Your Vote 2020: Bringing Election Coverage To Viewers Across TVNZ Channels And Platforms
By: TVNZ
30% Believe Households Worse Off, 298,000 Expect To Lose Jobs
By: Horizon Research Limited
Findings Of Investigation Into COVID-19 Active Cases Privacy Breach
By: State Services Commission
New Zealand suspends extradition treaty with Hong Kong
By: New Zealand Government
Adjournment Debate: PM Jacinda Ardern
By: Hansard
Adjournment Debate: National Leader Judith Collins
By: Hansard
Adjournment Debate: NZ First Leader Winston Peters
By: Hansard
James Shaw Adjournment Speech
By: Green Party
Vaping Legislation Passes But Falls Well Short
By: Aotearoa Vapers Community Advocacy
ASH NZ Welcomes Vaping Legislation
By: ASH
Vaping Bill Passed, Now Consult With Business - VTANZ
By: VTANZ
View as: DESKTOP | MOBILE © Scoop Media