Source: New Zealand Government
Businesses can start applying to their banks for loans under the Business Finance Guarantee Scheme set up to support the New Zealand economy during the COVID-19 pandemic.
“We’re moving quickly to protect New Zealand businesses, jobs and the economy during this unprecedented global economic shock,” Finance Minister Grant Robertson said.
“The Business Finance Guarantee will help businesses with cashflow and operating expenses, and comes in alongside the $8-12 billion wage subsidy scheme keeping people in jobs, and workers and employers connected during the lockdown.
“For most businesses their most important relationship is with their bank. The Government is using its balance sheet to give businesses and their banks space to work together through this crisis.
“We’re supporting businesses through the lockdown so their workers can stay home, break the chain and save lives, while also putting in place longer-term solutions to kickstart the economy out the other side.”
Under the scheme, businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans up to $500,000, for up to three years. The scheme will offer a total of $6.25 billion in loans to New Zealand businesses.
The Government is guaranteeing 80% of the risk, while the banks are covering the remaining 20%. A normal lending process will be followed by the banks, which will make the lending decisions. Further details can be found on the banks’ websites.
The Business Finance Guarantee scheme is part of the more-than $25 billion of economic support announced to date. Other initiatives include:
- The $8-12 billion wage subsidy scheme to protect jobs, and keep workers and businesses connected during the lockdown.
- The $500 million increase to public health funding for the immediate response.
- A six-month deferred mortgage scheme for home-owners affected by the virus, so people don’t lose their homes due to COVID-19.
- A doubling of the Winter Energy Payment so older New Zealanders can stay warm during winter.
- Main benefit increases, and
- Rent freezes and a ban on terminations of tenancies/evictions other than in exceptional circumstances.