This is a summary of the financial help that the Government can offer to Businesses from business.govt.nz as at February 2021
New support available
The government has announced new COVID-19 support for businesses.
Short-Term Absence Payment
A Short-Term Absence Payment is available at all Alert Levels to employers to pay workers who follow public health guidance and stay home while waiting for a COVID-19 test result. To be eligible, workers need to miss at least one shift of work, and be unable to work from home.
The payment is $350 for each worker. Employers or the self-employed can apply for any worker once in any 30-day period.
Resurgence Support Payment
From late-February, a Resurgence Support Payment will be available if we are at Alert Level 2 or above for a week or more. Businesses and the self-employed will be eligible if they experience an actual decline in revenue of 30% over a 14-day period. The decline in revenue must be as a result of the specific Alert Level escalation, not just COVID-19 in general.
You must have been in business for at least six months to be eligible. Pre-revenue firms, such as start-ups are also eligible.
Charities and not-for-profit organisations are also eligible.
Wage Subsidy Scheme
The Wage Subsidy Scheme will be available if any part of the country moves to Alert Level 3 or above for a week or more.
Businesses and the self-employed will need to prove a 40% decline in predicted or actual revenue.
Find out more information about the new support.
COVID-19 financial support for businesses(external link) — Work and Income
Leave Support Scheme
If you, or your staff have been told by a health official to self-isolate and cannot work from home, you can apply for the COVID-19 Leave Support Scheme. This support will be paid as a lump sum covering two weeks (you can reapply if required).
Under changes to this scheme, businesses will no longer be required to show an actual or predicted revenue drop or their ability to support an employee was negatively impacted by COVID-19, to be eligible to access the payment.
Leave Support Scheme(external link) — Work and Income
Small business cash flow loan scheme (SBCS)
The small business cash flow loan scheme will provide assistance of up to $100,000 to businesses employing 50 or fewer full-time employees. This includes sole traders and self-employed businesses.
Details of the loans include:
- $10,000 to be provided to eligible businesses
- an additional $1800 per equivalent full-time employee
- interest free if the loan is paid back within two years
- an interest rate of 3% for a maximum term of five years
- repayments not required for the first two years
- you must show at least a 30% drop in revenue due to Covid-19, measured over a 14-day period in the past 6 months
- maximum amount you can borrow depends on the number of full-time and part-time employees.
Use the small business cash flow loan scheme eligibility tool and find out how to apply.
Applications are open until and including 31 December 2023 through myIR. Go to the ‘I want to’ section, and select ‘Apply for the small business loan’.
myIR(external link) — Inland Revenue
If your businesses doesn’t have a myIR account, you will need to create one to apply.
Most applicants will receive their loan payment in full from Inland Revenue within five working days. You don’t have to accept the full loan amount you’re offered, and can decide to take a smaller loan.
Tax and ACC support
COVID-19 business and organisations(external link) — Inland Revenue
ACC levy invoices for the 20/21 financial year would usually have been sent from 1 July, but will now be sent in October. ACC has more information about delayed invoices and guidance to help.
If you are having trouble making ACC payments, ACC has guidance to help. If you are no longer in business, it’s also a good idea to let ACC know.
Business debt hibernation
If business debt hibernation is right for your business, this is how it helps you manage your debts.
- You set up an arrangement for your existing debts, eg paying your creditors only a percentage of what you owe them on time and delaying the rest.
- You get up to a month of protection while you set up the arrangement, meaning most creditors can’t enforce their debts, eg applying for your business to be liquidated.
- If your creditors agree, you get a further six months of protection.
Use the business debt hibernation decision tool to find out if it’s a good option for your business and if so, how to get started.
Business finance guarantee scheme
More small and medium-sized businesses may be eligible for the Business Finance Guarantee scheme, with a simplified and expanded scheme now in place.
Participating lenders can provide new loans, increased limits to existing loans or a revolving credit facility to eligible businesses. The scheme supports lenders by government taking on the default risk of up to 80% of the loan.
Changes to the scheme mean the loans can be used for capital purchases and projects relating to, responding to or recovering from the impacts of COVID-19. This means businesses can use the credit, for example, to modify their premises to operate at different alert levels or meet changing demands. Banks can lend to businesses with an annual revenue of up to $200m, while loans are available from non-bank lenders for businesses with annual revenue up to $50m. There is a lending limit of $5m, or $3m from a non-bank.
The Crown has also clarified that it will guarantee its share of a scheme loan without a personal guarantee – though lenders make their own lending decisions and may have their own requirements. Borrowers are still liable to pay the loan back in the usual way.
R&D loan scheme
Callaghan Innovation’s R&D Loan Scheme is to help businesses continue their research and development activities impacted by COVID-19.
Details of the loans include:
- up to $400,000 to support planned eligible R&D activity
- interest free if the loan is paid back in full within a year
- 3% interest from the start of the loan
- repayments not required for the first three years
- maximum loan period of 10 years.
Businesses are eligible if:
- they have R&D activity in place, or were preparing an R&D plan before COVID-19
- they are planning on spending at least $50,000 on eligible R&D activity
- their R&D funding has been impacted by COVID-19.
R&D Loan Scheme(external link) — Callaghan Innovation