Important message for NZ Businesses
The Government has announced the following changes to the Small Business Cashflow (Loan) Scheme:
- Currently no interest is charged if the loan is repaid within one year. This will be increased to two years. If you repay the loan within two years no interest will be charged.
- The current Scheme requires funds to be applied against core operating costs. This is going to be broadened so it will include things like capital expenditure.
- The application period for the loan will be extended and can now be made until 31 December 2023, an extension of three years.
These changes will be made by Inland Revenue unilaterally changing the terms and conditions of new and existing loan contracts. As yet a date is still unconfirmed as to when this will happen, but it will be by 31 December 2020, and we'll keep you informed.
At this stage, all other aspects of the loan scheme remain in place, including:
- It is for businesses with 50 or fewer full-time-equivalent employees.
- They must have been in business on 1 April 2020 and have experienced a 30% decline in revenue as a result of COVID-19 restrictions.
- The maximum amount that can be borrowed is $10,000 plus $1,800 per full-time-equivalent employee and only one amount can be drawn down.
- The loan period is for five years and interest rate is 3% from the date of the loan being provided.
The Government has asked for advice on some of these existing aspects of the loan scheme, so further changes may happen at a later stage.
Take your business to the next level with help from Alliott NZ's experienced team of Chartered Accountants and Business Advisors. Contact us in Auckland on 09 520 9200.