The first Cabinet decision of the new Labour Government is a three year extension of the Small Business Cashflow Loan Scheme, and a provision of up to two years interest free, to support small businesses as the Government accelerates its economic response to Covid-19.
Cabinet decided today to extend the scheme, which was due to expire at the end of the year, out to 31 December 2023 and to extend the interest free period from one year to two years.
“Supporting small business by extending the interest free loans will provide greater certainty, support confidence in the sector and help accelerate our economic recovery,” Jacinda Ardern said.
“Our recovery from Covid won’t end in December and nor should the scheme.
“The pandemic is growing around the world and the economic impact of the virus is likely to be with us for some time, so we have extended the scheme for three years, providing business with certainty there will be support for them over the longer term.
“Different businesses may need to access the scheme at different times, so it’s important it remains as a backstop for them to fall back on if times get hard.
“With access to the last round of wage subsidy coming to an end it is important viable businesses who need cashflow support can access it as they recover.
“We have also extended the interest free period. We know there will be constraint in the economy over the medium term, so the extended interest-free period will provide businesses some cashflow relief in the period they are not charged it.
“Close to 100,000 businesses have received a loan to date, with total lending of $1.6 billion. Feedback from businesses has been extremely positive and we have been told the support was provided at a time when it was most needed.
“The average value of each loan to date has been modest, around $17,000. But it is much needed working capital, to help businesses in a tight spot.
“The economic recovery from Covid is a priority for the Government and supporting small business is at the heart of our recovery. It is fitting Cabinet’s very first decision is to support these business and the jobs they create,” Jacinda Ardern said.