4 May 2020
Last week, the Government announced it will provide interest free loans for a year to small businesses impacted by the COVID-19 economic shock to support their immediate cashflow needs and meet fixed costs.
The Small Business Cashflow Loan Scheme will provide assistance of up to $100,000 to firms employing 50 or fewer full-time equivalent employees.
The scheme will provide $10,000 to every firm and in addition $1800 per equivalent full-time equivalent employee. For example:
Total loan amount
Individual self-employed/sole trader
The Loans will be interest free if they are paid back within a year. After that, the interest rate will be 3% for a maximum term of five years. Repayments are not required for the first two years.
The eligibility criteria are the same as for the Wage Subsidy Scheme. Businesses will also have to declare they are a viable business and they will use the money for core business operating costs, entering into a legally binding loan contract.
The scheme will be administered by Inland Revenue who will be taking applications from 12 May. If you are considering applying, your Findex adviser is happy to assist with this.
Findex has developed a Government Stimulus Health Check and free Business Wellbeing Toolkit to help businesses manage potential risks and take full advantage of eligible stimulus assistance. Book your Health Check here.
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