The government just announced the Small Business Cashflow Loan Scheme (SBCS) today.
Government will provide interest-free loans for a year to small businesses impacted by Covid-19.
The details of the scheme are as follows:
Loan scheme will provide $10,000 to every firm and in addition $1,800 per equivalent full time employee FTE (up to a maximum of $100,000)
Interest is 0% if the loan is repaid within 12 months otherwise 3% for a maximum term of 5 year
Repayment not required for the first 2 years
IRD will administer the payments and repayments of the scheme
Application is made through IRD via myIR from 12th of May
Assistance is for firms who are employing 50 or less FTE employees
Eligibility criteria are the same as for the Wages Subsidy scheme (experienced >30% decline in revenue, operating in NZ, etc)
The loan is for small businesses to meet their core business operating costs (eg rent, insurance, supplier payments etc) and cannot be used to pass through to shareholders or owners of the business eg dividend or loan to shareholder/owners.
Businesses will have to declare they are a viable business and also enter into a legally binding loan contract.
More details will be made available next week and we will update here.
In the meantime, if you haven't already registered for myIR, please do so in preparation. The link to register is here.