Government Loans - Small Business Cashflow Scheme

The government is providing loans of up to $100,000 to help businesses, including contractors and self-employed, experiencing cash flow difficulties.

IRD is administering the scheme on behalf of the government, however the loan is not a ‘tax’ product, therefore you must apply for the loan yourself - we cannot do this for you (but we can help or walk you through the process).

Applications are open from 12 May to 12 June 2020 and are made through myIR website. 

Loan terms and amount:

  • $10,000 to be provided to eligible businesses
  • an additional $1,800 per full-time employee equivalent
  • interest free if the loans are paid back within a year
  • an interest rate of 3% for a maximum term of five years
  • repayments are not required for the first two years.

Inland Revenue has a calculator to help you work out how much you may be able to borrow.

Eligible businesses and organisations

  • To qualify for the loan, you must have 50 of few full-time-equivalent employees
  • If you have received the wage subsidy for your employees, you are eligible for the loan.
  • If you did not apply for the wage subsidy, you can still receive the loan if you meet the criteria of the wage subsidy.
  • Your business must be viable, and you need a plan to ensure it remains viable.
    • Please talk with us about this before applying for the business loan
    • Being viable means the directors or owners believe it is more likely than not the business will be able to pay its debts as they fall due within the next 18 months.
    • You must keep evidence of the business ongoing viability at the time of requesting the loan. 

Applying for the loan

For detailed instructions click here to download a step by step guide on how to apply through myIR.

In summary, once you’ve logged into your business myIR account, select ‘Apply for a small business loan’ under ‘I want to…’ and follow the instructions.

Most applicants will receive their loan payment in full from Inland Revenue within five working days. Once you have submitted the loan application you will not be able to edit and change any details.  

What you need before applying

  • A myIR account for your business. This will be a separate username and login from your personal myIR account (unless you are a sole trader). Click here to register a myIR account for a business.
  • The bank account you want the loan to be paid into
  • Your New Zealand Business number (NZBN) - go to www.nzbn.govt.nz/get-an-nzbn to check if you have one or apply if you don’t already have one
  • Employees details: if you have received the wage subsidy from Work & Income or completed payday filing in the last 30 days, your employee’s information will be prepopulated. Otherwise, you will need to manually enter your employees’ name, IRD number, and whether they are full or part time employees. 

Important Notes

You will need to repay the loan in the future. This is a short-term measure to help during the recovery from Covid-19.

Your bank will consider future loan repayments (servicing the loan), in future borrowing requests. For example, in 18 months-time if you want to buy a house, the bank will consider your ability to meet the bank mortgage repayments, as well as repaying the IRD loan. Having an outstanding loan to IRD is likely to decrease future borrowing potential. 

Contact Us

Contact Tim Doyle or Jane Evans today for a no obligation phone call or meeting on 07 823 4980 or email us. Our office is in Cambridge, NZ, but distance is no problem. We have many international and national clients.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.


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