Government announces new loan scheme for small businesses
The Government has today announced a new loan scheme to support small businesses impacted by COVID-19.
The Small Business Cashflow Loan Scheme will provide assistance of up to $100,000 to firms employing 50 or fewer full-time equivalent employees. It will also be open to sole-traders and the self-employed.
The Scheme will provide $10,000 to every firm and an additional $1,800 per equivalent full-time employee. These loans will be interest free if they are paid back within a year.
After that the interest rate will be 3% for a maximum term of five years. Repayments will not be required for the first two years of the loan.
Eligibility criteria is expected to be the same as for the Wage Subsidy Scheme. Businesses will also have to declare, among other things, that:
- They are a viable business;
- They will use the money for core business operating costs; and
- They will enter into a legally binding loan contract.
The Scheme will be administered by Inland Revenue.
Applications will open on 12 May.
More information on the Scheme, including eligibility criteria and a calculator to determine the amount a business can borrow, is expected to be made available by Inland Revenue on its website next week.
We will continue to monitor developments and encourage you to keep in contact with us directly to discuss how the Small Business Cashflow Loan Scheme and other financial support measures may assist you and your business.
Please contact our corporate and commercial team for further assistance.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose. While we make every effort to ensure the accuracy of the information contained in this article, this is a rapidly changing environment and the information will be subject to change