Interest Free Loans!
April 30, 2020
We wanted to contact you and summarise today’s announcement the Government has made regarding cashflow support for small businesses.
The Government will provide interest free loans for a year to small businesses impacted by the COVID-19 pandemic. This is to support their immediate cashflow needs and meet fixed costs such as to cover rent, insurance, utilities, supplier payments and rates.
The eligibility criteria are the same as for the Wage Subsidy Scheme. Businesses will also have to declare that they are a viable business, they will use the money for core business operating costs and enter into a legally binding loan contract.
This Small Business Cashflow Loan Scheme will provide assistance of up to $100,000 to entities employing 50 or fewer full time equivalent employees. This is calculated by a $10,000 base loan with an additional $1,800 per full time employee.
Loans will be interest free if they are paid back within a year. The interest rate will be 3% for a maximum term of five years. Repayments are not required for the first two years.
This scheme will be administered by Inland Revenue and they will be taking applications from the 12th of May.
We don’t yet know what the application process will look like but once we have further information we will let you know.
As always we are here to help so please do get in touch.