Small Business Cash Flow Loan
The Government has announced it will provide interest free loans for a year to small businesses impacted by COVID-19 to support their immediate cashflow needs.
The Small Business Cash Flow (Loan) Scheme (SBCS) is for small to medium size business owners, including sole traders and the self-employed, who have been adversely affected by COVID-19.
Businesses are entitled to a one-off loan with the maximum amount loaned $10,000 plus $1,800 per full-time-equivalent employee.
The annual interest rate is 3% from the start date of the loan, but you do not have to pay interest if the loan is fully paid back within the first year. Repayments are not compulsory in the first 24 months. The maximum term of the loan is 5 years and it must be paid back in full by 31 July 2025.
How to apply?
Applications open from 12 May 2020 up to and including 12 June 2020. Payment of the loan should be within 5 working days. The loan is administered by the IRD and you will need access to MyIR (your IRD login) to apply for the loan. To apply for the SBCS loan click here
Criteria for the loan
Your business must have 50 or fewer full-time equivalent employees and you need to be eligible for the wage subsidy scheme.
You must be able to show a minimum of 30% reduction in revenue (sales) for a month from January 2020 – June 2020 due to COVID-19, compared to sales the previous year. To check if you had a 30% reduction or more in turnover download the calculator here
Your business must be viable and have an ongoing plan to ensure it remains viable, cashflow forecasting, Business Continuity Plans are evidence of this.
The loan is to be used for operating costs only
Each entity will need a New Zealand Business Number – if you are a company this is found on the companies office website, if you are a Sole trader or Partnership you will need to follow the link at the IRD to apply for one.
To see the full eligibility criteria click here
Additional funding available
The Government has allocated additional funding to the Regional Business Partner (RBP) Network to support New Zealand businesses during the COVID-19 pandemic. As we are a qualified provider of the RBP Network you may be eligible for funding of up to 100% for business continuity planning and cashflow forecasts and management. Contact us as we can talk you through how the application process works.