Update: Further changes have been announced regarding the Small Business Cashflow Loan Scheme on the 18th December 2020, taking effect from early February 2021;
- New criteria now includes businesses with less than 12 months trading that experience a drop in revenue due to COVID-19 over a 14-day period, compared with the same or similar period in the previous month.
- Businesses can now draw down on the loans more than once.
Read more about the announcement here.
Previously (9th November 2020), the government had announced the following regarding the Small Business Cashflow Loan scheme:
- The use of the loan has been broadened from core operating expenses to include capital expenditure, such as plant & equipment
- The loan is interest free for 2 years which has increased from 1 year
- Applications for the loan scheme are open until 30 December 2023
Given the introduction of capital expenditure to this scheme at no-to-low interest rates, it could be a good chance to look at updating your plant and equipment or business vehicle.
The small business cashflow loan scheme will provide $10,000 to every business and an additional $1,800 for each full time employee or equivalent. For example:
|Business Size||Base Loan||FTE equivalent amount||Total Loan|
At this stage, all other aspects of the loan scheme remain in place, including:
- It is for businesses with 50 or fewer full-time-equivalent employees.
- They must have been in business on 1 April 2020 and have experienced a 30% decline in revenue as a result of COVID-19 restrictions.
- The loan period is for five years and interest rate is 3% from the date of the loan being provided. This will be charged if the loan is not repaid within 2 years
- Repayments are not required for the first 2 years
- Businesses will need to declare they are viable and enter into a legally binding loan contract
If you don’t already have a myIR account for your business, you will need to register for a business myIR account as the application is completed through myIR.
Please feel free to get in contact if you would like to discuss how this lending might work for you and if you will be eligible to apply.
About Kiwitax – Award winning business improvement, tax and accounting service
Here’s the thing. As a business, rental property owner or start-up, you get a kick out of having your own gig. But chances are dealing with your tax and accounting leaves you cold. Good news! We love it, so hand it over to Kiwitax and we’ll look after it all for you.
Whether you deal with us online, by phone or drop into our Napier office, you’ll find a friendly, professional hardworking team ready to work with you, however you keep track of your financial information and from wherever you do business. And all for a fixed price. It takes just two minutes to get a quote.
Plus if you’re at a loss to know how to improve aspects of your business – from growth planning to cashflow management, even tax debt and so much more – we’re all over that too. Our Business Improvement advisors can help you make a plan and put it into action.
Kiwitax are a preferred training provider for Business Improvement services through the Regional Business Partner Network Capability Voucher Scheme. This is a government funded scheme designed to boost business capability by providing funding of up to 50% of approved training programs with specified training providers up to a maximum value of $5000.
If you liked this article and want to make improvements in your business, with quarterly coaching sessions specifically tailored to support you to identify and achieve your business goals, lets chat!