NIWE business support package
The business support package for businesses, orchards, and farms significantly impacted by the North Island Weather Events being the Auckland Anniversary floods & Cyclone Gabrielle, is now available.
It will be available to businesses in Northland, Auckland, Waikato, Bay of Plenty, Tairāwhiti, Hawke's Bay, Tararua, and Wairarapa.
The package includes:
- the North Island Weather Events Loan Guarantee Scheme that will enable commercial lenders to provide loans to highly impacted businesses across all sectors with more favourable terms, such as reduced interest rates.
- the North Island Weather Events Primary Producer Finance Scheme that will provide concessionary loans and equity finance to severely impacted, land-based primary sector businesses. For more information, see North Island Weather Events Primary Producer Finance Scheme on Kānoa’s website.
See the related document:
About the North Island Weather Events Loan Guarantee Scheme
The North Island Weather Events (NIWE) Loan Guarantee Scheme (the Scheme) is targeted to provide relief for businesses highly impacted by the NIWE. The Scheme supports the provision of Scheme loans to viable businesses. It encourages banks, non-bank deposit takers (non-banks) and non-deposit-taking lenders to lend with favourable terms, including reduced interest rates, by the Government taking up to 80% of the loan’s default risk. Borrowers remain liable and must pay back the debt, with interest, in the usual way.
How the loan guarantee works
The Scheme is set out to support businesses that are highly impacted by the NIWE but can still receive commercial lending. The Crown will guarantee 80% of Scheme loans provided by lenders to eligible businesses. As a result, lenders won’t need to hold as much capital to cover the debt and can use the capital elsewhere. This will enable lenders to pass on reduced interest rates to borrowers and may also allow lenders to provide further accommodations relating to interest only periods or lending terms.
The Scheme is a relief mechanism to aid businesses that have incurred material losses to their cashflow, production capabilities and/or damage to uninsurable assets as a result of the NIWE. Businesses considered by their lender to be viable will be eligible to receive loans supported under the Scheme. If you think your business may be eligible, get in touch with your lender. Once the terms are agreed the supported loan will act like any other loan with its own terms, conditions, and obligations to follow.
The Scheme can support up to $2 billion in both new and the refinancing of existing lending (including across lenders) and will support up to $10 million in loans for each borrower.
Loans under the Scheme will be supported for up to 5 years from date of issue.
In considering eligibility for the Scheme, lenders will apply the following eligibility terms:
You may be eligible for a loan under the Scheme if you:
- are New Zealand based business
- operate in one of the NIWE-impacted regions
- have experienced material losses as a direct result of the NIWE, and
- if your business has or is forecasting:
- a 20% reduction in stocking (eg, stock units) or production (eg, fruit-trays or tonnes harvested or kgs of milk solids)
- a 20% reduction in gross income (net of stock purchases)
- a 20% reduction in cashflow (net of any direct Government funding received by the customer), or
- a 20% increase in operating costs.
The above percentages are guidelines to assist in determining your eligibility and should not be viewed as hard rules. Your lender will assess your individual circumstances while determining whether or not you are eligible.
Unlike the Kānoa Primary Producer Finance Scheme, the NIWE Loan Guarantee Scheme is sector agnostic.
Participating lenders
Deeds of indemnities have been agreed with the following lenders:
- ANZ
- ASB
- BNZ
- Heartland
- Kiwibank
- Rabobank
- Speirs Finance Group
- UDC
- Westpac
We will continue to update this list as lenders choose to participate in the Scheme.
How to apply
If you are interested in accessing a Scheme supported loan and your lender is listed above, your first step is to express interest with your lender and they will work with you to determine your eligibility.
Other NIWE financial support for businesses
The related NIWE Primary Producer Finance Scheme is also available if your business was severely impacted by the NIWE and can’t currently access financing from commercial lenders. The NIWE Primary Producer Finance Scheme makes concessional loans and equity support available for businesses that have a reasonable chance of returning to viability with additional support. This Scheme will be administered by Kānoa, Regional Economic Development & Investment Unit.
Frequently Asked Questions
Is the North Island Weather Events Loan Guarantee Scheme a grant?
No. The Scheme is the provision of loans to businesses highly impacted by the NIWE through participating banks. To a business, loans under the Scheme will look like any other loan and will need to be repaid as normal.
How long is the Scheme available?
Scheme supported loans are available until 30 June 2024, for a maximum of 5 years from the date of issue.
I’m not sure if I’m eligible?
Your first step is to speak with your lender to discuss your individual circumstances. Your lender will be able to work with you to determine whether you are eligible for the Loan Guarantee Scheme.
What happens if I am highly impacted, but my lender is not participating in the Loan Guarantee Scheme?
If your existing lender is not participating in the Loan Guarantee Scheme you are able to talk to another lender. The list of approved participating lenders is above.
Is the Loan Guarantee Scheme only accessible via banks?
Banks, non-bank deposit takers and non-deposit taking lenders all have the opportunity to participate in the Scheme. A list of approved lenders participating in the Scheme above.
Do I have any other options if my lender is unwilling to lend to my business under this Scheme?
Yes, if your lender does not currently believe it can lend to you, you should talk with Kānoa about concessional loans and equity. Read more on the Kānoa website.
Can I defer payments on a supported loan?
The repayment schedule and commercial terms are agreed with the lender. You will need to contact your lender if you need to discuss repayment terms of the loan.
I have been highly impacted but cannot take on additional debt, can I still benefit from the Scheme?
Yes, you can refinance existing debt under the Scheme. Your lender will be able to help you determine whether you meet the eligibility criteria.
What happens if I am unable to repay the loan?
You are responsible for repayment of your loan. If you are unable to continue payments, the lender will take action that it considers commercially reasonable to recover the debt.
If I default, how much of the loan amount is paid by the Crown?
The Crown will pay 80% of any loss incurred by the lender on a Scheme loan, after they have completed their default processes to recover the debt.
How does the Government ensure that lenders are complying with the terms?
The agreement with lenders includes a general requirement for lenders to pass on the benefits of lower interest rates and favourable terms reflective of the benefit provided by the Crown guarantee. The agreement also includes accountability mechanisms, such as ongoing reporting and rights of review and audit.
Why is the Crown covering 80%?
Based on the positive feedback in the Business Finance Guarantee Scheme post-implementation review, we consider that the 80% guarantee level provides the right balance between encouraging lenders to pass through benefits and maintaining commercial incentives. Risk sharing ensures responsible lending.
Contact
Your first point of contact should be your lender. You can also contact us by email at [email protected]