As part of the ongoing support packages in response to the COVID-19 disruptions the Government is offering a Small Business Cashflow Loan Scheme to assist business with their immediate cashflow concerns as a result of the COVID-19 shutdown. This loan is available until 24 July 2020.

The maximum amount each business can borrow is $10,000, plus $1,800 per full time equivalent employee, the loan is interest free if repaid within 12 months, with interest charged at 3% p.a. after the first 12 months and can have a loan term of up to five years.

The loan can only be used for operating costs. Businesses applying for the loan should ensure they check any banking covenants they may have in relation to debt ratios prior to making an application.

To be eligible for the scheme you must meet the following criteria:

  • Employ 50 or less full-time equivalent employees;
  • and Have been eligible for the for the Wage Subsidy Scheme; and
  • You have a viable business going forward i.e. you will be able to pay your debts as the fall due over the next 18 months

Details on the scheme can be found on the ‘COVID-19 Small Business Cashflow Scheme’ page on the IRD website. This link provides further detail of the following:

  • Terms Conditions
  • Eligibility criteria
  • Size of loan available
  • Applying for the loan.
  • Receiving and repaying the loan.

If your business is under tough working capital conditions for the next few months, this loan presents a great alternative to the extension of overdraft facilities from your bank. Please remember, it is still a loan and will need to be repaid. Therefore, you need to ensure you are able to repay this alongside other cashflow commitments over time.

Please get in touch with your client manager if you have any questions regarding this loan, we are here to help you at this difficult time.