Government’s $6.25bn business loan scheme goes live

2nd April 2020 By Staff Reporter | news@tourismticker.com | @tourismticker

The Government’s $6.25bn loan scheme set up to support businesses struggling to balance the books during the Covid-19 pandemic has gone live.

Under the Business Finance Guarantee Scheme, businesses with annual revenue between $250,000 and $80m can now apply to their banks for loans of up to $500,000, for up to three years.

The Government would guarantee 80% of the risk, with banks covering the remaining 20%. A “normal lending process” would be followed by the banks, which would make the lending decisions, according to a statement from Government.

Nine banks comprising ANZ, ASB, Bank of New Zealand, Heartland Bank, HSBC, Kiwibank, SBS Bank, TSB Bank and Westpac are to be part of the scheme.

Finance minister, Grant Robertson, said: “We’re moving quickly to protect New Zealand businesses, jobs and the economy during this unprecedented global economic shock.”

“The Business Finance Guarantee will help businesses with cashflow and operating expenses, and comes in alongside the $8bn-$12bn 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.”

The scheme will offer a total of $6.25bn in loans to New Zealand businesses, and forms part of the more than $25bn of economic support announced to date.

Other initiatives include:

The $8bn-$12bn wage subsidy scheme to protect jobs, and keep workers and businesses connected during the lockdown.
The $500m 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.