Govt extends COVID-19 business loan scheme

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Small Business Minister Stuart Nash said the extension "shows the Government is continuing to back them in the post-lockdown environment". Photo credit: Getty

The Government has announced the Small Business Cashflow Loan Scheme will be extended to the end of the year.

The interest-free scheme, introduced to help businesses keep cash coming in during the lockdown, had already been extended to July 24. It'll now go until at least December 31.

"This means those businesses who are doing okay now, but who may experience cash flow difficulties further down the track will still have access to it," Prime Minister Jacinda Ardern said on Sunday at the Labour Party's annual congress.

"We've received more than 90,000 applications from small businesses so far, and paid out over $1.5 billion in loans. Around 80 percent of firms who applied have between one and five staff."

Small Business Minister Stuart Nash said the extension "shows the Government is continuing to back them in the post-lockdown environment".

"The interest-free loans came at just the right time. Businesses with temporary cashflow issues during the lockdown are now taking advantage of one of the most open economies in the world. More than 1500 borrowers have already repaid almost $4.9 million.

"We want to protect jobs and keep as many businesses afloat as possible. The loans are a useful complement to the wage subsidy. They provide businesses with cashflow support for non-wage costs, while the wage subsidy ensures they keep staff on the books."

The average loan so far has been $16,700. The first year is interest-free - after that 3 percent interest is charged. Repayments aren't needed for the first two years.

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