Repaying Small Business Cashflow Scheme Loans
Now that it has been two years since the first Small Business Cashflow Scheme (SBCS) Loans were offered, interest will start to be applied and regular repayments required for those businesses who applied early.
If the loan has been fully paid back within the initial two-year period, interest won’t be charged.
You can pay back the loan prior to the two-year period, by using any of your standard IRD payment methods using code SBC.
If you haven’t paid back the loan within the initial two-year period, IRD will send you a payment schedule with payment dates and amounts for when regular payments must be made. Interest will be charged on the loan at 3% per annum and will be backdated to the original draw-down date of your loan. You have up to a total of 60 months (five years) to pay back the loan and any interest charged.
If the thought of repaying small business cashflow scheme loans gives you anxiety and you need help managing your cashflow to repay the loan, Kiwitax can help with a cashflow forecast.
If you want ongoing help and more visibility over your businesses cashflows and tax obligations, our Monthly Accounting Service could be ideal for you. Just get in touch and we can discuss options with you.
How long do I have to repay the SBCS loan?
The loan period is five years (60 months). Repayments are not compulsory in the first two years, but you can make voluntary repayments at any time.
When will I be charged interest on my SBCS loan?
No interest will be charged during the first two years. If you have a balance that is owing on day one of the third year this will incur interest charges at 3% per year backdated to the original draw down date.
How do I know what my repayments are for the SBCS loan?
Inland Revenue will send you a schedule of payments with amounts and dates at the end of your two-year interest free period.
Can I still apply for the SBCS loan?
Yes, applications are open until 31 December 2023. Eligibility criteria applies.
If you have already received and repaid the SBCS loan, you may be able to apply one more time. Your business will need to meet the eligibility criteria again at the time of applying.
How much can I borrow for the SBCS loan?
From 21 March 2022, the base loan amount increased from $10,000 to $20,000. Businesses can apply for the base amount plus up to $1,800 per full time employee (up to 50 employees).
If you applied for the initial $10,000 base loan, you can apply for the $10,000 top up plus any initial amount you were eligible for but did not withdraw.
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