COVID-19 - New Government Loan Scheme Announced (1 May 2020)

Today the Government announced a new loan scheme for businesses.

In essence the lending schemes via the banks have not worked and the government is creating a new system they will administer.

It’s early days but the detail we have so far is outlined below:

What can you get?

In theory up to $100,000. Most companies can borrow $10,000 plus $1,800 for each full time employee.

Sole traders can borrow $11,800.

Who is eligible?

Employers with 50 or fewer staff

Same criteria as the wage subsidy scheme

Businesses must be viable and they must confirm that they are (detail is light on this point).

What are terms and repayment?

It’s definitely a loan – and needs to be paid back.

Repayments would not be required during the first two years and the maximum term is 5 years.

What is the interest rate?

It will be interest free if paid back with a year. Otherwise interest will be charged at 3% per annum.

How do you apply?

The scheme will be administered by IRD. Applications are opening on 12 May 2020 and at expected to be open for at least a month.