Small Business Loans and Cashflow

Small Business Loans and Cashflow

If you received a Small Business Cashflow Loan (SBCS), is your repayment plan on track?

The scheme was launched to assist eligible small-to-medium businesses adversely affected by COVID-19. A top-up loan allowed businesses that had already accessed a loan to draw down an additional $10,000 with a new repayment period of five years. Applications could be submitted until 31 December 2023.

The first two years of loans are interest-free if the loan is not in default. Repayments aren’t compulsory during this period. Interest starts accruing at the beginning of year three.

Keep in mind

After the initial two-year period, Inland Revenue notify you of the instalment repayments required. If you miss repayments, you will be charged interest at 3% plus use of money interest (UOMI).

Under certain circumstances, Inland Revenue may consider you to have [defaulted] (https://www.ird.govt.nz/covid-19/business-and-organisations/sbcs/if-you-default-on-the-small-business-cashflow-scheme-loan) on the loan. You will be liable for the outstanding amount immediately, as well as 3% interest (if the event of default has happened after the initial two-year period) and UOMI.

If you provide false or misleading information or received any payment you were not entitled to, you may be subject to investigation.

How we can help

Make sure repayments don’t drag down your monthly cash flow. It is also important to consider the impact of these loans on your total financing strategy. If you require long-term funding from the bank, consider how these loans may impact any finance applications.

Let us know if you need support to manage your repayment or cash flow planning.

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