More Relief for Businesses Affected by COVID-19 as Government Announce the Small Business Cashflow


Amended 11 May 2020

The Government has introduced a Small Business Cashflow (loan) Scheme to support small to medium businesses owners, including sole traders and self-employed, to support their immediate cashflow needs and meet fixed costs, due to the impacts of COVID-19.

Businesses with up to 50 full-time equivalent employees can apply. The amount of the loan is up to $100,000 (In most cases, businesses will be entitled to a loan amount of $10,000 plus $1,800 per full-time-equivalent employee, to a maximum of $100,000). The annual interest rate will be 3% beginning from the date of the loan being provided. Interest will not be charged if the loan is fully paid back within one year. Repayments are not compulsory in the first 24 months. The loan has a five-year term and must be repaid by 31 July 2025.

Applications will be open from 12 May 2020 up to and including 12 June 2020. Businesses will apply for the loan payment through myIR. Inland Revenue will administer the payments and repayments of this scheme, with the pay-out expected within five working days. It is advised that businesses should speak with their financial advisors before taking this loan.

To be eligible for the SBCS loan a business or organisation must have 50 or fewer full-time-equivalent employees and be eligible for the Wage Subsidy Scheme (you do not need to have received the wage subsidy to receive a loan). Your business or organisation needs to be viable and you must have a plan to ensure it remains viable. You must keep any evidence of the business or organisation’s ongoing viability at the time of requesting the loan, as IRD may audit your application.

Evidence might include, for example:

  • A cash-flow forecast for the business or organisation for the short term.

  • A plan for where revenue will come from in future market conditions, and a forecast of those revenues.

  • Financial statements showing the business or organisation has enough resources to sustain itself when including the SBCS loan.

  • Your accountant’s assessment that the business or organisation is viable and ongoing.

The government has allocated 100% funding to the Regional Business Partners Network to help businesses out with Cashflow Forecasting and Business Continuity Planning. For more information around this please don’t hesitate to give Lisa a call DDI 928 4277 or email lisa@sass.nz. To apply for the funding contact Kathryn at kathryn@mcoc.org.nz or 021 330 923.

For more information about the SBCS loan and the eligibility criteria visit IRD.

In addition to the Small Business Cashflow (loan) Scheme the Government has also released tax changes (flexibility for statutory tax deadlines and tax loss carry-back scheme), wage subsidy, commercial property measures, consultancy support and the Business Finance Guarantee Scheme, in which the Government is making changes to the criteria, including removing the requirement for a General Security Agreement and removing the requirement that the business is required to draw down all existing financing arrangements before applying for a BFGS loan.

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