Date: 18th November 2020
Are you planning for 2021 or beyond? Don’t miss the newest information regarding the Small Business Cashflow Loan Scheme. The first cabinet decision of the new Labour government, which was announced on 9 November, recognises that the effects of COVID-19 on NZ businesses are here to stay for a while longer. If you own a small business that managed to ride the storm caused by the original restrictions, but are beginning to find business tough, this could be perfect for you.
Read on to find out more.
Originally the scheme was due to expire at the end of this year (31 December 2020). This has now been extended for a further three years to 31 December 2023. If you did not meet the criteria (see below) until now, you can still apply for a loan.
The loan period remains at five years with an interest rate of 3% (applied to the full term), but there will be no interest payments if the loan is paid back in full by two years. This was originally one year. If you were one of the almost 100,000 businesses who have already taken advantage of this loan you need not worry. This interest free period will still apply to you and you don’t need to do anything. The Inland Revenue will make changes to the terms and conditions for all current loans by, they anticipate, 31 December 2020.
While this loan is still related to a loss of income from COVID-19, restrictions on how the loan can be used have also eased. Originally the loan needed to be applied to core operating costs but can now be used to invest in business development. If you haven’t already started writing your business plan for 2021, now is the time to do this and consider if this loan could be useful.
At this stage all other aspects of the loan scheme will remain in place, including:
For more information go to Inland Revenue.
If you would like to discuss how a small business cashflow loan could help your business, get in touch.