Small business owners have borrowed $ 116 million from IRD loan program since lockdown began
SME borrowing through Inland Revenue-administered small business loan program reaches $ 1.85 billion from more than 114,000 borrowers
Small business owners have borrowed nearly $ 116 million through the government’s small business cash loan program since the Covid-19 lockdown began on August 17.
The Small Business Cash Loan Program (SBCLS) was launched in early May 2020 to help businesses in difficulty because of Covid-19. It is supervised by Inland Revenue.
An Inland Revenue spokeswoman told interest.co.nz that 8,800 loan applications had been received since Aug. 17, for a total borrowing of $ 138.74 million. A total of 7,233 loans were approved for a value of $ 115.75 million.
Since the inception of the program, $ 2.025 billion in loan applications have been received from 126,801 potential borrowers. A total of $ 1.848 billion has been loaned to 114,373 borrowers.
Under the SBCLS, “viable” businesses can obtain unsecured, interest-free loans from the government of up to $ 100,000 depending on their size, comprising a base loan of $ 10,000 plus $ 1,800 for each full-time employee. up to 50 employees.
Loans are interest free if they are repaid within two years. Thereafter, an interest rate of 3% will be charged for a maximum term of five years, but no repayment will be required for the first two years. If borrowers do not fully repay their loan within two years, they will be charged interest for the life of the loan.