The government has introduced the Small Business Cash Flow Loan Scheme (SBCS) to assist businesses as the country re-opens.
Even though most businesses can now operate as normal, many still face an uncertain future, and the SBCS is meant to ensure they can continue to operate. The scheme will be open to small and medium businesses, the self-employed, and sole traders. The term of the loan can be up to five years.
At a press conference announcing the SBCS, Prime Minister Jacinda Ardern commented that the scheme will assist businesses that are finding it difficult to seek support from banks and will enable them to continue paying fixed costs, like rent.
“It has become clear that the support that is available to our small and medium businesses from banks is not meeting their needs nor our expectations as a Government,” Finance Minister Grant Robertson said. “That is why we have moved to provide this scheme to give some much needed cashflow.”
To apply for the scheme, the organisation must have under 50 full-time employees.
The scheme will be directly administered by the Inland Revenue Department, which will oversee payment and repayment of loans.
Initial loans of up to $10,000 per business and $1,800 per full-time employee are available at interest rates of 3%. No interest will be charged on the loans if they are paid back within one year.
Applications for the scheme opened on May 12th, 2020 and will cease on June 12th, 2020, unless the scheme is extended further.