The Government is throwing billions at the economy to keep it afloat, with policies including a mortgage repayment holiday, a wage subsidy scheme and a finance guarantee scheme offering businesses loans of up to half a million dollars.
The Government has launched a business finance guarantee scheme for small and medium-sized businesses, to protect jobs and support the economy. The Crown, in partnership with participating approved banks, will support targeted new loans (including increases to existing limits) to eligible businesses, as a response to difficulties caused by COVID-19.
Under the scheme, businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans up to $500,000, for up to three years. The scheme will offer a total of $6.25 billion in loans to New Zealand businesses.
The Government is guaranteeing 80% of the risk, while the banks are covering the remaining 20%. A normal lending process will be followed by the banks, which will make the lending decisions. Further details of this scheme can be found on the banks’ websites.
However, the loans may not be as accessible as we were lead to believe. A business owner has told Newshub that banks are acting like ‘wolves in sheep’s clothing’ when administering those loans – with one even asking business owners to put their own homes on the line.