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.
- 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.
For more information about the scheme visit here and if you have any questions please contact us.
Wishing you all the best in your business endeavours.
