Small businesses in the local channel will have a bit more time to make use of the government’s Small Business Loan Scheme, which has been extended to three years.
Prime Minister Jacinda Ardern said on 5 November that the extension of the Small Business Loan Scheme and the rollout of the Flexi-Wage job support programme were among the government’s top economic priorities before the end of the year.
The loan scheme was originally intended as a stop-gap, according to Ardern, providing access to finance for vulnerable but viable businesses which needed support to cover costs in the wake of lockdowns and the impact of COVID-19.
“Before Christmas we will extend the Small Business Loan Scheme out to three years and extend the interest free period to two years,” Ardern said. “We will also extend the purpose of the scheme and allow business to borrow to invest in new equipment and digital infrastructure.
“With COVID getting worse around the world and parts of Europe re-entering lockdown it’s clear the economic impact of the virus is going to remain with us for some time. It’s important that viable but vulnerable business, who may experience issues down the track, still have access to this line of credit to help them through.
“Making these changes before Christmas provides small business with certainty, especially when the holiday period can be a quieter time for some businesses who may need to access the scheme,” she added.
Ardern said that the government would invest an additional $311 million into the Flexi-Wage scheme prior to Christmas, in a bid to increase the average subsidy paid to employers to take on a worker and enable an additional 40,000 unemployed people to take advantage of the programme.
“Maori, Pacifika and women have been disproportionately impacted by job losses to date,” she said. “My hope is the expanded Flexi-Wage scheme will play an important role in helping people from these groups to get quickly back into work.
“While the scheme will take some time to fully get up and running we want to be in a position to assist business to take on workers over the Christmas New Year period if they can, rather than waiting until after the holiday period,” Ardern added.
In July, Revenue and Small Business Minister Stuart Nash said the government would further extend the Small Business Cashflow Loan Scheme, which had already been extended to 24 July, to 31 December this year.