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Businesses will find it easier to access cheap cash to make investments in a new plant with the government extending its Small Business Loan Program to three years and the interest-free period to two years.
Prime Minister Jacinda Ardern used her first long cabinet meeting to extend the plan, which Labor promised to do during the election campaign.
The companies used the initial scheme to access cheap loans that would help them with their basic operating expenses, such as rent, insurance and utilities. During the election campaign, Labor said it estimated that up to a quarter of companies had agreed to the plan.
Finance Minister Grant Robertson said Monday that nearly 100,000 companies had agreed to the plan, borrowing $ 1.6 billion.
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Ardern and Robertson announced radical changes to the scheme.
Initially scheduled to expire at the end of December, the government will extend the loans for another three years.
The interest-free period has also been extended from one to two years. Loans still have to be repaid within five years.
“The pandemic is growing around the world and the economic impact of the virus is likely to be with us for some time, so we have extended the plan for three years, giving companies the certainty that they will have long-term support, – Ardern said.
“Different companies may need to access the scheme at different times, so it is important that it remains a backup they can turn to if times get tough.”
ROBERT KITCHEN / Things
Jacinda Ardern has finished her first proper cabinet meeting.
The new scheme will not be limited to just companies that need to borrow for their operating expenses, as was the case under the original scheme.
Companies will now be able to use the loans to invest in new plants and machinery.
The changes do not require any legislation to pass through Parliament.
More to come
