Small Business Cashflow Scheme (SBCS) – changes, February 2022
posted on
The Small Business Cashflow Scheme (SBCS) was introduced to support small to medium businesses and organisations struggling with a loss of actual revenue due to COVID-19. The following changes will be made to the SBCS before the end of March.
Quick summary:
Applications are open until 31 December 2023.
From end of March, the amount that can be borrowed is $20,000 (increased from $10,000), plus $1,800 per full-time equivalent employee (up to 50 employees).
The loan repayment period is 5 years (60 months).
The first 2 years of existing loans will be interest-free provided the loan is not in default. Interest will apply at a rate of 3% per year on the remaining loan balance from the first day of the third year of the loan period.
Additional detailed information:
Base loan amount increased
The SBCS base loan will be increased to $20,000 (from $10,000).
This means the amount that can be borrowed will be $20,000, plus $1,800 per full-time equivalent employee (up to 50 employees).
The loan repayment period remains 5 years (60 months).
Interest-free period
The first 2 years of existing loans will become interest-free provided the loan is not in default.
Interest will apply at a rate of 3% per year on the remaining loan balance from the first day of the third year of the loan period.
Existing borrowers can get a top-up loan
Existing borrowers who already have a loan (and have not defaulted on this loan) will be able to apply for a top-up loan. They can borrow an additional $10,000 plus any amount they did not borrow in their initial loan.
The top up loan can be drawn down as a lump-sum or as up to 4 smaller instalments over time before the end of the scheme on 31 December 2023.
A borrower who receives a top-up loan will have 2 separate loans, each with their own 5-year loan term and 2-year interest-free period. For example:
first SBCS loan – interest-free for 2 years from the date the original loan was made available to them
top-up loan – interest-free for 2 years from the date of the first draw down. Any additional draw downs after this will not start a new interest-free period.
New loans
New SBCS borrowers, and those that have already paid back their loan in full before 31 December 2023, can borrow up to the new maximum amount as a lump sum, or,
as up to 4 instalments before the end of the scheme. The first 2 years of the loan will be interest-free from the date the loan is made available to them (further draw downs do not start a new interest-free period).
Applying for the SBCS
The SCBS is open till 31 December 2023.
Customers can apply for the SBCS and the top-up loan in their myIR account at ird.govt.nz
