COVID 19 - Small Business Cash Flow Scheme
COVID-19: Support for small and medium sized enterprises - 12 May 2020: (as per government website extract)
The Small Business Cash Flow Scheme (SBCS) has been introduced to support organisations and small to medium size businesses affected by COVID-19.
- A business who is eligible must only have 50 or less full-time equivalent employees and can borrow $10,000 plus $1,800 for each equivalent full-time employee up to a maximum of $100,000.
- No interest will be charged on the loan if it is paid back within a year, otherwise the interest rate is 3% per year and the loan is required to be paid back in 5 years. Note that repayments are not compulsory for the first 2 years however voluntary payments can still be made over this period.
- The business or organisation is experiencing a minimum 30% decline in actual or predicted revenue from January 2020 to June 2020 as defined in the wage subsidy scheme.
- Businesses will need to be eligible for the wage subsidy as well as be able to declare that they are a viable business and have a plan to ensure it continues to remain viable.
- The loan needs to be used to pay for core operating costs such as rent, insurance, utilities and rates.
- Applications are only open until 12 June 2020.
How do you apply for the loan?
We, as tax agents, are not able to apply for the loan on behalf of our clients. You must apply for the loan yourself.
You need to have an IRD login to apply for the loan. See below the instructions for applying for the loan.
On your IRD login, you should see a new tab under the “I want to…” section saying Apply for a Small Business Loan. Then you follow the prompts.
If you have issues trying to find where this is or how to log in then contact us through the link to out contact form at the bottom of this page.
How long will it take for the loan to be deposited into my bank account?
Once approved, most loan applicants will receive their loan payment in full within 5 working days.
What does it mean to be a viable business?
The IRD have recently given some directive on this. It generally means as a Director or Owner, you expect to be able to pay your debts as they fall due over the next 18 months. Evidence of viability may be required at the time of applying for the loan such as cashflow forecasts and business plans.
The loan application requires a NZBN number, how do I get one?
If your business is a company, the NZBN number will pre-populate in your application.
Sole traders, partnerships and trust structures may not have a NZBN number.
If you need to apply for one, do so by clicking the below link:
I’m unsure if I will be eligible for the loan, what should I do?
For advice on the loan scheme, talk to us, your tax agents. We will be able to work with you to see if this is right for you and can provide assistance in what is required when applying for the loan.
We are well positioned to provide advice and support to all our clients as we self-isolate as a country. This includes guiding your business through this unprecedented situation as they access government supports and entitlements. While our offices are closed, we are still open for business.
Should you need support during this challenging time, please get in contact with one of our partners.
Alan Macdonald – firstname.lastname@example.org or 021 324 527
Jack Perniskie – email@example.com or 03 208 1314
Erin Howes – firstname.lastname@example.org or 027 208 0262
Caleb Macdonald – email@example.com or 021 020 04636
Tim Walsh – firstname.lastname@example.org or 027 436 8663
If you have any general questions, feel free to use our contact us form on the website.