More small businesses will be eligible to take out interest-free loans under changes to a government cashflow scheme announced on Friday (December 18).

The COVID-19 Small Business Cashflow (Loan) Scheme (SBCS) has been extended until 2023; the interest-free period has been extended to two years; and the eligibility criteria has also been broadened to include new businesses.

“There are encouraging signs for our economy, but the global economic outlook remains uncertain,” revenue minister David Parker said. 

“The scheme provides a backstop for small and medium businesses.”

Small business minister Stuart Nash said cashflow support for small and medium enterprises (SMEs) has been central to government efforts to accelerate the economic recovery and sustain businesses and jobs.

“The decision to extend the interest-free loan scheme is designed to give confidence to our smallest businesses and keep up the momentum of recovery.” 

The scheme can provide up to $10,000 to businesses as well as an additional $1,800 for each full-time equivalent employee. PHOTO: Supplied

While data for the Queenstown Lakes district is not available, David said a milestone of 100,000 SMEs in New Zealand had drawn on the government support, to the tune of $1.6B. 

Small businesses from around the country can apply to the scheme, which has a maximum loan of $10,000 plus $1,800 per full-time-equivalent employee.

Around 82 per cent of loans so far have gone to firms with one to five employees and roughly 92 percent are to firms with 10 or fewer staff.

Most loans have gone to SMEs in construction and building (17 per cent), accommodation, restaurants and cafes (12 per cent), those offering professional, scientific or technical services (10 per cent), retail trade (nine per cent), and manufacturing (seven per cent).

The SBCS was introduced to support SMEs struggling because of loss of actual or predicted revenue as a result of COVID-19. 

The expanded eligibility criteria come into effect in February 2021.

Find more information on how to apply to the Small Business Cashflow (Loan) Scheme here.