Small Business Cashflow Loan Scheme
Late last week the Government released some details about a new Small Business Cashflow Loan scheme which will be available for businesses as part of the Covid-19 response package.
Under the new “small business cashflow scheme”, businesses will be able to get interest-free or low-interest loans of up to $100,000.
Key features of the scheme are as follows:
- The cashflow scheme will be available to businesses employing 50 or fewer staff.
- Eligibility criteria is the same as that for the wage subsidy scheme. Sole traders will be able to borrow up to $11,800 provided they meet a viable business test and have experienced a 30% drop in revenue.
- Applications for the scheme open on 12 May 2020. The scheme will be administrated by Inland Revenue. Small companies will have 1 month from the opening date to apply for loans; however, the deadline can be extended.
- Companies can borrow $10,000, plus an additional $1,800 for each full-time employee, therefore a company employing 50 staff can apply for the maximum amount of $100,000.
- The loans are interest-free where the amount is paid back within a year. Otherwise, interest will be charged at a rate of 3% annually and the loan must be paid back within 5 years. No repayment is required within the first two years.
Wishing you all the best in your business endeavours.
The Navigator Accounting Team