To ensure SMEs (Small to Medium Enterprises) are better able to weather the storm stemming from the COVID-19 lockdown, the Government is now offering loans of up to $100,000.
“We recognise many businesses have had little or no revenue through Alert Level 4 and Level 3. This scheme is designed to give them access to cashflow to meet fixed costs on concessionary terms,” Minister for Small Business, Stuart Nash, says.
The loans will provide assistance of up to $100,000 to companies with 50 or fewer employees. They will be interest free if paid back within a year or capped at an interest rate of 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 that they are a viable business; they will use the money for core business operating costs and enter into a legally binding loan contract,” he adds.
Financial support from banks has, so far, not been up to scratch, Finance Minister, Grant Robertson believes.
“It has become clear that the support that is available to our small and medium businesses from banks is not meeting their needs nor our expectations as a Government,” he says. “We are committed to sharing the burden of the impacts of COVID 19. As a responsible Government we must ensure we are using taxpayer money carefully as we provide support for business.”