PKF Francis Aickin Limited, Far North, New Zealand
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28 May 2020
The purpose of this loan is to provide working capital to small business to enable them to pay their supplier and operating costs, which will provide funds to other small businesses, and the money goes around in the local economy. In simple terms you can get up to $10,000 plus $1,800 per full time employee/working owner ( full time equates to working more than 20 hours). For example, a business with 10 employees could apply for up to $28,000. There are conditions relating to the loan, which must be adhered to, full details are detailed on the IRD website https://www.ird.govt.nz/-/media/Project/IR/Documents/COVID-19/Small-business-cashflow-loan-scheme.pdf No repayment is due for TWO years – after this the loan will be repayable in regular instalments – likely to be monthly. Interest is charged from day 1 – at 3% per annum – but interest is only charged on the principal outstanding and not on any interest accrued to date. If you repay the entire loan within 12 months – the loan is interest free. If you do default on the repayments or make a false declaration, or for any other reason become ineligible for the loan – similar to other loans the loan is repayable immediately and the interest charged will be 3% plus a default rate which will be the same as the IRD use of money rate (currently 7%) Time is running out – you need to apply using your My IR login by 12 June Additional wage subsidy The government has also announced an extra 8 weeks wage subsidy for businesses whose turnover has fallen by more than 50% due to COVID 19. For those businesses/sole traders who applied for the initial wage subsidy, you can only apply once you have completed the 12 week subsidy. Although the Government paid out all 12 weeks in one lump sum – it was for 12 weeks – with the date of receipt effectively being week 1. Any application can be made from the date the later of the end of the 12 week subsidy or 10 June (if you hadn’t previously claimed wage subsidy) until 1 September. On the date on your application, the business calculates its turnover for the last 30 days (please remember turnover is based on sales invoices/income which may not be the same as cash received from customers, and compares this against the same 30 day period last year. If the turnover is down by at least 50% due to COVID 19 you will be entitled to claim the additional wage subsidy. For example if you applied for the additional subsidy on 31 August – you would compare your turnover from 1/8/20 – 30/8/20 with 1/8/19 – 30/8/19. If you need help or guidance, or just want someone to help you chew over the future of your business, don’t hesitate to call us.
We’re pleased to let you know that we are now business as usual – well almost!Our Kaitaia office is back to normal business hours 8am – 5.00pm and our Mangonui office by appointment. Many staff members are back working in the office while others continue to work from home. Everyone is available via phone or pre booked appointment. Stay safe and well.
For more information on how we can help your business, get in touch