Keeping afloat with NZ’s Business Finance Guarantee Scheme

A Business Finance Guarantee Scheme is now available to small and medium sized businesses in an effort to combat the negative economic impacts of COVID-19.
 
Businesses struggling to keep afloat due to difficulties caused by the coronavirus may be eligible to apply for the Crown’s new support targeted loans under the Business Finance Guarantee Scheme, which aims to help small to medium sized New Zealand businesses get through the COVID-19 crisis. New Zealand-based companies with an annual turnover between $250,000 and 
$80,000,000 are eligible for the loan scheme.
 
What are the loan conditions?
The facility limit for an individual loan will be a maximum of $500,000. However, the maximum amount your bank is prepared to lend you will be determined by your bank.
Interest rates will be determined by each individual bank under their normal lending criteria.
Repayments can be made up to a maximum term of three years (although exact terms are determined by your bank).
Loan applications are open until 30 September 2020.
 
How can you apply?
Before applying for a loan, make sure that your preferred bank is participating in the new loan scheme. While all New Zealand registered banks are able to participate, this does not mean that the bank you are looking to loan from is. Applications for the Business Finance Guarantee Scheme are made and accepted as per usual business loans at banks.
The banks will assess your business’ circumstances and decide whether or not you qualify for a loan under the scheme. The Treasury (which has oversight of the compliance of participating banks through a robust monitoring and reporting process) is also strictly holding banks accountable for their assessment process. Applications cannot be made to the Government directly.
While applying for a loan with such conditions may be tempting, keep in mind that the Business Finance Guarantee Scheme aims to support businesses with urgent liquidity and bridging finance requirements and as a result, loans are only given out to a limited number of reasons which coincide with the Government’s agenda. For example, you cannot access the scheme if your purpose for taking out a loan is to refinance an existing debt. 
For more information, visit the business government NZ website. 

 

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