The North Island Weather Events (NIWE) Loan Guarantee Scheme (the Scheme) concluded on 30 June 2024, with Scheme loans no longer being available.
A Scheme loan must have been approved, signed, and documented by 30 June 2024 for inclusion in the Scheme – however it does not have to be drawn down. Although the Scheme has concluded, lenders remain ready to help if your business needs finance. You should in the first instance discuss your business needs with your usual lender.
The Scheme supported the provision of Scheme loans to viable businesses. It encouraged banks, non-bank deposit takers, and non-deposit takers to lend with favourable terms, including reduced interest rates, by the Government taking up to 80% of the Scheme loan’s default risk. Borrowers remain liable and must pay back the debt, with interest, in the usual way.
What the North Island Weather Events Loan Guarantee Scheme provided
The North Island Weather Events (NIWE) Loan Guarantee Scheme (the Scheme) was targeted to provide relief for businesses highly impacted by the NIWE but could still receive commercial lending.
The Scheme was for businesses, orchards, and farms significantly impacted by the NIWE being the Auckland Anniversary floods and Cyclone Gabrielle. It was available to businesses in Northland, Auckland, Waikato, Bay of Plenty, Tairāwhiti, Hawke's Bay, Tararua, and Wairarapa.
The Crown would guarantee 80% of the Scheme loans provided by lenders to eligible businesses. As a result, lenders would not need to hold as much capital to cover the debt and could use the capital elsewhere. This would enable lenders to pass on reduced interest rates to borrowers and may also allow lenders to provide further accommodations in relation to interest only periods or lending terms.
The Scheme itself was a relief mechanism to aid businesses that incurred material losses to their cashflow, production capabilities and/or damage to uninsurable assets because of the NIWE. Businesses considered by their lender to be viable were eligible to receive loans supported under the Scheme.
The Scheme was able to support up to $2 billion in both new and the refinancing of existing lending (including across lenders) and would support up to $10 million in Scheme loans for each borrower.
Loans under the Scheme would be supported for up to 5 years from date of issue.
Participating lenders
The Scheme comprised a range of registered banks, non-banks, and non-deposit taking lenders. Participants were:
- ANZ
- ASB
- BNZ
- Heartland
- Kiwibank
- Rabobank
- Speirs Finance Group
- UDC
- Westpac
- Xceda Finance
NIWE Loan Guarantee Scheme: Frequently Asked Questions
Is the NIWE Loan Guarantee Scheme a grant?
No. The Scheme is the provision of Scheme loans to businesses highly impacted by the NIWE through participating banks, non-banks, and non-deposit taking lenders. To a business, Scheme loans under the Scheme looked like any other loan and would need to be repaid with interest, in the usual way.
When was the Scheme available?
Businesses could apply to the participating banks, non-banks, and non-deposit taking lenders for a Scheme loan that was approved, signed, and documented by 30 June 2024 for inclusion in the Scheme.
Can borrowers defer payments?
The repayment schedule and commercial terms are agreed with the lender. Borrowers will need to contact their lender if they need to discuss repayment terms for these Scheme loans.
What happens if a borrower is unable to repay the Scheme loan?
Borrowers are fully responsible for repayment of their Scheme loan. If a borrower defaults, the lender will take action that it considers commercially reasonable to recover the debt.
If a borrower defaults, how much of the Scheme loan amount is paid by the Crown?
The Crown will pay 80% of any loss the lender incurs on a defaulted 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 Treasury has oversight of their compliance through a robust monitoring and reporting process.
Contact
Your first point of contact should be your lender. You can also contact us by email at [email protected]