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New Loans For Small Businesses

The Small business cash flow loan scheme (SBCS) will provide government loans for businesses to support their cash flow needs. Find out about eligibility and how to apply.

New Zealand is still at Alert Level 3. Restrictions are in place for businesses to keep workers and customers safe.

The Prime Minister announced that we will move to Alert Level 2 at 11.59 pm on Wednesday, 13 May.

Businesses must self-assess their ability to meet the rules and operate safely, just as they would normally meet their duties under the Health and Safety at Work Act. Government agencies won’t make these decisions for businesses.

For more information, check out the business.govt.nz page for Workplace operations at COVID-19 alert levels.

Small business cash flow loan scheme (SBCS)

One-off government loans are available for businesses and organisations impacted by COVID-19, including sole traders and the self-employed, to help with cash flow. Applications are open from 12 May to 12 June 2020 and can be made through myIR. Here’s an overview of the scheme. Detailed information can be found on the Inland Revenue website.

Eligibility

The SBCS is open to small to medium businesses with 50 or fewer full-time employee equivalents. This includes sole traders and self-employed businesses.

To get an indication of your eligibility, use the business.govt.nz SBCS eligibility tool. For a full list of detailed criteria, visit Inland Revenue (external link).

Loan terms and amount

Details of the loan include:

  • $10,000 to be provided to eligible businesses
  • an additional $1800 per full-time employee equivalent
  • interest free if the loans are paid back within a year
  • an interest rate of 3% for a maximum term of five years
  • repayments not required for the first two years.

The maximum amount you can borrow depends on the number of full-time and part-time employees you have. If you are a business without employees, ie sole trader or self-employed, you can receive a loan of up to $11,800.

Inland Revenue has a calculator to help you work out how much you may be able to borrow.

Maximum SCBS loan size (external link) — Inland Revenue

You don’t have to accept the full loan amount you’re offered, and can decide to take a smaller loan.

If you received the wage subsidy, the number of employees you noted in that application will be applied to your SBCS application.

How to apply

Applications are open from 12 May to 12 June 2020 through myIR. Go to the I want to section, and select Apply for the small business loan.

myIR (external link) — Inland Revenue

If your businesses doesn’t have a myIR account, you will need to create one to apply.

Register a myIR account for a business or organisation (external link) — Inland Revenue

Most applicants will receive their loan payment in full from Inland Revenue within five working days.

Keep in mind you can only apply once and can’t change your application once submitted. So you may want to speak to your accountant or advisor before applying to make sure the loan is the best option for you.

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