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A comprehensive guide to where small businesses can find the support they need

If you own a small- or medium-sized business, finding and accessing financial support amid all the noise and information can be overwhelming. So we’ve put together a list of what’s out there.

Government support 

The Covid-19 wage subsidy

With $11 billion paid out over the past three months, the government’s wage subsidy is the first step for businesses, sole traders and the self-employed who’ve been affected by Covid-19. It allows employers who can show an actual or forecasted drop in revenue to keep their employees working by subsidising their wages: $585.80 per full-time worker per week and $350 for part time.

Originally set for a 12-week period, the scheme has been extended by eight weeks from June 10 for businesses that can show a 40% drop in revenue in the 30 days before applying. Applications can be made through Work and Income and payments are made in a lump sum, typically within two business days.

Small business cashflow loan scheme (SBCS)

Set up to provide quick cash injections to hard-hit SMEs, the scheme allows businesses with fewer than 50 full-time employees to apply for a loan of up to $10,000 plus $1,800 per full-time-equivalent employee, directly through the government. It’s also open to sole traders and self-employed businesses.

The loan has a five-year repayment term, with a 3% interest rate. However, it’s interest free if paid back within the first year. Applications are open from May 12 to July 24 2020 through the IRD website.

Business finance guarantee scheme

Another mechanism to provide cashflow loans to viable SMEs, the difference here is that the loans are provided through approved banks with the government guaranteeing up to 80% of the risk and banks the remaining 20%.

To be eligible for the loan, businesses must be New Zealand-based, with annual turnover of up to $80 million and not on a bank’s credit watch list as of January 31, 2020.

Because it’s done though the banks and not through IRD, your bank will decide whether a new loan can be supported under the scheme through its normal credit assessment process, and you will still be liable and must pay the debt back with interest in the usual way. Interests rates may be lower depending on your bank’s offerings. The maximum loan amount is $500,000 for up to three years. More information on this here.

Tax loss carry-back scheme

Also implemented through the IRD, the tax loss carry-back scheme allows businesses expecting to make a loss in the 2020 or 2021 year to use that loss to offset profits they made the year before.

In other words, if you estimate a loss for the next year, the IRD can refund some or all of the tax already paid for the preceding year, therefore providing some cashflow. The refunds will be processed faster if done through the online IRD tool MyIR.

Business debt hibernation

Another government initiative, this scheme helps companies, trusts and other business entities manage their debts and stay solvent through the tough times until they can once again operate viably. Subject to the approval of creditors, businesses can enter into a period where debt repayments are minimised or delayed so that they are protected from liquidation.

A business is protected for a month upon making the arrangement, and, if creditors agree, that period can be extended to six months. More information on this here.

Independent support

Outside of government, a range of independent agencies is providing financial support and advice for businesses affected by Covid-19.

Manaaki

Emergency business advisory forum Manaaki connects those needing advice with a support network of business experts across multiple sectors. Businesses or individuals can sign up to either lodge a query, view the forum and existing questions and answers, or connect directly with industry experts.

Manaaki emergency business forum (Photo: Manaaki)

Chambers of commerce

Throughout New Zealand, district and regional chambers of commerce are equipped with online resources to provide support, advice and training to local businesses. The Auckland Business Chamber, for instance, will provide a free business mentor for three months, while the Kāpiti Coast Chamber of Commerce is offering a series of Zoom seminars aimed at supporting local businesses.

New Zealand-made products

A Facebook page set up in the midst of the Covid-19 lockdown, New Zealand Made Products is a simple yet effective way for homegrown businesses to market their goods and services to a national audience. Any business can post on the site, provided a picture, caption and contact details are included. 

The group has been a lifeline for many small businesses, with some reporting an explosion in online sales and enquiries in a matter of weeks. Although there is a six-day wait time for posts to be approved, the exposure to an audience of half a million group members makes the wait well worth it.

Mentemia

Launched by Sir John Kirwan and developed by a team of clinical experts, Mentemia is a mental health app originally designed to help tackle stress and anxiety in the workplace. With support from the Ministry of Health, Kiwibank and Westpac, the app is now available for free to all New Zealanders until at least October 2020. It is available on both Google Play and the App Store.

Support for Māori businesses

For Māori communities and businesses, there is a range of targeted government support measures set aside, including $1m of funding.

The initiative is being led by NZ Māori Tourism but is open to members from all partner organisations and industries, and will provide administration support to Māori businesses alongside HR and cashflow advice. Enquiries can be made to 0800 4 POUTAMA.

Te Ohu Kaimoana, an iwi-endorsed and funded kaupapa Māori organisation, has more information on the range of support available.

Banking support

Available for existing Kiwibank customers, businesses may be able to access the following banking support depending on individual circumstances.

Temporary overdrafts

Businesses may be eligible for a temporary additional overdraft for up to 180 days.

Interest-only business lending 

Businesses customers may be eligible for interest-only business lending for up to six months.

Repayment deferral

This is an option for customers to defer payments on their business lending for up to six months, thereby freeing up cash for urgent expenditure.

Early access to investment products 

An option for those who need early access to term deposit or notice saver funds.

Merchant services 

To provide additional help and support for business banking customers, Kiwibank is waiving contactless fees on debit card transactions from  March 25 to June 30, 2020. Merchants will receive a refund of these fees when their merchant service fee is charged for the month.

Business Mastercard

Kiwibank has temporarily reduced the standard interest rate on the Kiwibank business Mastercard from 16.90% p.a. to 9.95% p.a. from April 15 to July 15, 2020. This means any interest charged on statements issued between those dates will be applied at this lower interest rate. This applies regardless of when you made the transaction or when interest started to accrue. Statements issued from July 16, 2020 onwards will have interest charged at the standard interest rate.

Credit, lending and other criteria may apply depending on the type of help required. More information on these support options are available on Kiwibank’s business support page and the Ask Kiwibank Anything platform.

This content was created in paid partnership with Kiwibank. Learn more about our partnerships here



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