There are a range of grants available from Government and a number of tax changes have been implemented by Inland Revenue to support Kiwi businesses. Please take some time to read the following information which covers:
- leave grant support scheme
- e-commerce funding and incentives
- small business loan scheme
- business finance guarantee scheme
- NZTE support for businesses impacted by COVID-19
Please get in touch with us if you need support or advice about the following packages available from Government.
The leave grant is available for employers (including sole traders) to pay employees who have to remain at home due to Ministry of Health guidelines (eg, have tested positive for COVID-19, have had close contact with someone who has the virus, are at higher risk of contracting the virus etc) and/or can’t work from home. The leave grant is paid at the same flat rate as the wage subsidy scheme.
E-commerce funding and incentives
Hon Grant Robertson allocated $10 million in his 2020 Budget to help small businesses improve their e-commerce service offerings; this package includes grants and incentives for e-commerce implementation. The funding acknowledges the importance of e-commerce during times of disruption and will also go towards training for more digital advisers to support SMEs as they incorporate this technology into their business operations. The fund is supported by an additional $12.5 million to advance the trans-Tasman e-invoicing programme.
Small Business Loan Scheme (SBCS)
The Government is now providing one-off interest-free loans for a year to SMEs impacted by COVID-19. The SBCS has been set up to support affected business’s immediate cashflow needs and for those that are experiencing loss of actual or predicted revenue. Eligible companies are those that employ 50 or fewer people, and the maximum amount loaned is $10,000 plus $1,800 per full-time-equivalent employee. Repayments are not required for the first two years. Loans that are paid back within in a year will not incur any interest; after that period, an interest rate of 3% for a maximum of five years will apply. Applications close on 31 December 2020. The scheme is being managed by Inland Revenue; more information about how to apply can be found here.
The Government has made some significant changes to its Business Finance Guarantee Scheme (BFGS). It has:
- increased the cap on loans from $500,000 to $5m
- enabled businesses to utilise the loans for more than just cashflow; funds can now be used for capital assets and projects that will help companies respond to or recover from the impacts of COVID-19
- allowed businesses to refinance up to 20% of existing debt
- increased the revenue cap of $80m for eligible large businesses to $200m
- increased the maximum loan term to five years; the term was previously three years.
The Government doesn't require banks to take security or personal guarantees from borrowers, however, your bank can still choose to do so. Be sure to talk to your Grant Thornton advisor to discuss whether the BFGS is a viable option for your business.
The BFGS is available until 31 December 2020 at participating banks which include ANZ, ASB, BNZ, Heartland Bank, Kiwibank, SBS Bank, TSB, Bank of China, Westpac.
NZTE support for businesses impacted by COVID-19
The Government has provided New Zealand Trade & Enterprise (NZTE) with additional funding for Kiwi businesses impacted by COVID-19. Companies can apply for up to $5,000 in funding to access certain business consultancy services Grant Thornton New Zealand has been approved to provide finance and cashflow management, business continuity planning, HR, and digital enablement strategy services under NZTE’s COVID-19 support programme. We can also help guide you through the application process. More information about eligibility criteria and how to apply can be found here.
Keep in touch
We are committed to supporting Kiwi businesses through this challenging time. Our advisors can assist you with applying for any of the Government grants outlined above. We can also help you identify steps to manage your cashflow and any decline in revenue that your business is currently experiencing. For more support and insights, be sure to visit our COVID-19 resource hub.
We hope that you, your teams and other stakeholders remain well – we’re all in this together.