Businesses can start applying to their banks for loans under the Business Finance Guarantee Scheme set up to support the New Zealand economy during the COVID-19 pandemic.
In his announcement yesterday, Finance Minister Grant Robertson said, “The Business Finance Guarantee will help businesses with cashflow and operating expenses, and comes in alongside the $8-12 billion wage subsidy scheme keeping people in jobs, and workers and employers connected during the lockdown.
“For most businesses their most important relationship is with their bank. The Government is using its balance sheet to give businesses and their banks space to work together through this crisis."
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 can be found on the banks’ websites.
In support of the Government’s Business Finance Guarantee Scheme, the Reserve Bank (RBNZ) today announced the introduction of a Term Lending Facility (TLF). The TLF is a new longer-term funding scheme for the banking system, to help promote lending to businesses by ensuring access to funding for banks at low interest rates for up to 3 years duration, which is longer than the Bank’s other liquidity facilities.
Click on the links below to read the Minister's and RBNZ's media releases.
For more information about the Business Finance Guarantee Scheme: COVID-19: Business finance support and mortgage holidays (business.govt.nz)