A new targeted COVID-19 support scheme has been released by the Government to help businesses
A new COVID-19 Support Payment of a maximum of $24,000 will be made available for businesses struggling with a business downturn during the Omicron outbreak.
Each COVID-19 Support Payment will be $4,000 per business plus $400 per full-time employee (FTE), capped at 50 FTEs or $24,000. This is the same rate as the most recent Transition Payment which the Government rolled out in December.
Businesses will have to show a 40% drop in 7 consecutive days within the 6 weeks prior to the shift to Phase 2 of the Omicron response on 15 February, compared to 7 days after that date, and an alternative option of 5 January 2021 to 15 February 2021. The alternative option covers a period when all of New Zealand was at Alert Level 1.
Applications for the first payment open on today with payments starting from 1 March.
Small Business Cashflow Loan changes
There will also be changes to the Small Business Cashflow Loans Scheme to increase the amount of funding available to eligible businesses through the introduction of a “top up” loan.
The top up loan will allow those firms that have already accessed a loan to draw down an additional $10,000 with a new repayment period of five years and the first two years being interest free. The additional interest only period relates to the new draw down amount only.
Cabinet has also agreed to remove the first two years of accrued base interest from all borrowers who have, or will, take out a loan under the scheme. This change will mean interest will only start accruing at the beginning of year three.