Updates to the Small Business Cashflow Loan Scheme

Small business cashflow loans

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
Sole Trader $10,000 $1,800 $11,800
3 FTE $10,000 $5,400 $15,400
50 FTE $10,000 $90,000 $100,000

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.


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