Small business owners have borrowed almost $116 million through the Government's Small Business Cashflow Loan Scheme since the Covid-19 lockdown started on August 17.
The Small Business Cashflow Loan Scheme (SBCLS) was launched in early May 2020 to help businesses struggling because of Covid-19. It's overseen by Inland Revenue.
An Inland Revenue spokeswoman told interest.co.nz 8,800 loan applications have been received since August 17, seeking total borrowings of $138.74 million. A total of 7,233 loans have been approved worth $115.75 million.
All up since the scheme launched, $2.025 billion in loan applications have been received from 126,801 would-be borrowers. A total of $1.848 billion has been loaned out to 114,373 borrowers.
Under the SBCLS, “viable” businesses can get unsecured, interest-free loans from the Government of up to $100,000 depending their size, comprising a $10,000 base loan plus $1800 for every full-time employee up to 50 employees.
The loans are interest free if they are repaid within two years. Thereafter an interest rate of 3% will be charged for a maximum term of five years, but repayments won’t be required for the first two years. If borrowers don't fully repay their loan within two years they'll be charged interest for the entire term of the loan.
8 Comments
You, as a New Zealand taxpayer, will get to pay it off.
(NB: Who, in the right mind, pays tax here at the moment?! It's been 'optional' for those with the means to structure their affairs for some time. ("Cross-my-heart-and-hope-to-die, I didn't mean to make a profit on the sale of that block of land, sir" etc.) But, those relatively few 'taxpayers' are swelling in number, and getting further down the taxpaying tree as time goes on.
The inevitable will be scrapping Income Tax and levies to fund the country, coming via Land Tax and GST)
The loan scheme is best thing ever. Small business owners gets to gamble one more time to see if their businesses will turn around. If it doesn't, just file a bankruptcy- interest is free and dying businesses has little to liquidate anyway.
Smarter businesses can convert their operations into a property investment company and invest in real estate interest free for a whole 2 years.
When things are going well, business talks a big game about how capitalism is the best thing ever and pocket the profits, but expect the Government to bail them out every time there's a bump on the road. They are the biggest socialists out there!
I hope there is a tax targeted to businesses to pay back this sort of debt, otherwise it will fall back on the responsibility of every hard working taxpaying New Zealander.
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