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COVID-19 • 2020-05-04

Government announces interest free loans for NZ SMEs

The New Zealand government has announced an interest free loan scheme for small and medium enterprises.

The small business cashflow scheme is 100% backed by the government and aims to help enterprises meet their immediate cash flow needs and fixed costs. It comes after the business finance guarantee scheme, which the government launched in partnership with banks, has not met the needs of many businesses.

What’s involved in the small business cashflow scheme?

The scheme will provide $10,000 to every business and an additional $1800 per equivalent full-time employee.

There is no interest if the loan is repaid within a year, after this time the interest rate will be 3%. The scheme has a maximum term of 5 years and repayments of the principal and interest are not required in the first two years.

Businesses will be able to apply to the IRD from 12th May.


  • Eligibility will be the same as the wage subsidy scheme.
  • The scheme is for businesses with 50 or fewer employees.
  • Businesses must declare they are viable and that they will use the money for core business operating costs.

Changes to the Business Finance Guarantee Scheme

Finance Minister Grant Robertson also announced changes to the business finance guarantee scheme put in place in partnership with banks. Two of the changes announced are:

  • removing the government requirement for a general security agreement
  • removing the requirement for businesses to have drawn down on existing loan facilities before they can apply.

For more information email the office here

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