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More than 6,000 companies have applied for a loan under the government’s Small Business Cash Flow Loan (SBCS) scheme, which was accessible since Tuesday.
The total loan amount requested under the scheme in the first hours of operation “far exceeds $ 100 million,” said Finance Minister Stuart Nash.
Prime Minister Jacinda Ardern announced Tuesday that companies can now apply for the scheme through the Inland Revenue website.
She said the loan will be “working capital for businesses” and will help with fixed costs like rent.
Payments to companies will be made within five days of loan approval, he said.
Tom Lee / Things
Payments to companies will be made within five days after loan approval.
The scheme is open to companies that have less than 50 employees.
Each company can claim a single loan of up to $ 10,000 and an additional $ 1,800 per full-time employee, reaching a limit of $ 100,000
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Ardern said the loan will be interest-free if it is repaid in full within the next 12 months, but repayments are not mandatory for the first two years.
After the interest-free period, companies will be charged an interest rate of three percent per year, for up to five years.
The loan is not subject to income tax or GST. Businesses may also claim deductions for expenses financed by the loan.
The plan was announced by Finance Minister Grant Robertson in early May, following the commercial finance guarantee plan announced in March, which allowed companies to apply for loans from banks.
Robertson said at the house Tuesday that the business financing scheme has been “adjusted” and that he will consider more “adjustments.”
Robertson said banks have provided $ 5 billion of “extra support” to companies, but the government wanted another way for small and medium-sized companies to access funds.
“I am always focused on saving jobs, creating jobs and creating decent jobs with good wages for all New Zealanders,” he said.
He said on May 1 that the small business cash flow loan scheme was necessary because it had become clear that the support the banks were providing to small and medium-sized businesses “did not meet their needs or our expectations as a government.”
Independent and self-employed merchants are also eligible for the loan scheme, with the ability to borrow up to $ 11,800.
Applications for the loan would be open until June 12.
Money has also begun to reach companies in the form of tax refunds under the loss transfer scheme.
Nash said $ 62 million was repaid in the first week of the plan, benefiting 676 small businesses.
“Tax refunds are a cash lifeline for companies with non-salary fixed costs, such as rent, interest and insurance. Without this support, these otherwise viable SMEs could be forced to close,” he said.
