04 May 2020
The New Zealand government has announced a cashflow loan scheme to support small businesses who have been impacted by the COVID-19 pandemic. This loan aims to support short term cashflow needs and fixed costs of impacted businesses.
The loan would aid small businesses employing up to 50 full time employees and will provide $10,000 per qualifying business. In addition to the $10,000, $1,800 per full time employee will be advanced under this loan scheme up to a maximum loan amount of $100,000.
The maximum loan term would be 5 years at an interest rate of 3%, but loans would be interest free if repaid within 12 months.
The qualifying criteria are the same as for the Wage Subsidy Scheme announced in March and include the following:
- Businesses should be New Zealand based businesses experiencing a minimum of 30% decline or predicted decline in revenue due to COVID-19 during the months of January 2020 to 9 June 2020.
- Businesses must have taken active steps to mitigate the financial impact of COVID-19.
- In addition, businesses must declare they are viable, commit to using the funds for core business operating costs and enter into a legally binding contract.
Applications for this Small Business Cashflow Loan Scheme open 12 May 2020 and should pay out very shortly after that.
Speak to us if you would like to know if your business qualifies for this loan or if you require assistance with a loan application.
Disclaimer:This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.
Stay in touch. Please do not hesitate to contact your client advisor.
