Don't miss the newest information regarding the Small Business Cashflow Loan Scheme.
The first cabinet decision of the new Labour Government, which was announced on 9 November, recognises that the effects of Covid-19 on NZ businesses are here to stay for a while longer.
If you own a small business that managed to ride the storm caused by the original restrictions, but are beginning to find business is tough, this could be for you.
Easing of restrictions
While this loan is still related to a loss of income from Covid-19, restrictions on how the loan can be used have also. eased. Originally the loan needed to be applied to core operating costs but can now be used to invest in business development.
What hasn't changed
At this stage all other aspects of the loan scheme will remain in place, including -
- it is for businesses with 50 or fewer full-time-equivalent employers
- you must have been in business on 1 April 2020 and have experienced a 30% decline in revenue as a result of Covid-19 restrictions.
- the maximum amount that can be borrowed is $10,000.00 plus $1,800.00 per full-time equivalent employee and only one amount can be drawn down.
- the loan period is for five years and the interest rate is 3% from the date of the loan being provided.
Interest free period extended
The loan period remains at 5 years with an interest rate of 3% (applied to the full term), but there will be no interest payments if the loan is paid back in full by 2 years. This was originally 1 year. If you were one of the almost 100,000 businesses who have already taken advantage of this loan you need not worry. This interest free period will still apply to you and you dont need to do anything. The Inland Revenue will make changes to the terms and conditions for all current loans by, they anticipate, 31st December 2020.
For more information:
Visit Inland Revenue website