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The re-elected New Zealand Labour government has moved to make changes to the Small Business Cash Flow Loan Scheme implemented soon after New Zealand’s lockdown response to Covid-19.

Firstly, applications for the loan have been extended by 3 years. That means that applications can be made for the loan right up to 31 December 2023.

There is no change to the criteria required to receive the loan. Furthermore an application for the loan needs to be made through Inland Revenue who can request supporting information by way of bank statements and other documentation which they can then compare with the GST returns that have already been filed.

Up until now the deal was that no interest will be charged if the loan was repaid within one year. This has now been extended by a year meaning no interest will be charged providing the loan is repaid within 2 years.

What you can use the loan for

To date the loan could only be used for meeting the day-to-day operating costs of the business. This has been broadened so that the loan can also be used on investing in the business such as on capital expenditure.

You need to be mindful that the loan cannot be used to repatriate to the owners or associated parties of the business. All government assistance is subject to audit and review. We understand that many of the Inland Revenue staff who were previously involved in processing applications have now been moved into an audit and review role as the applications dry up.

If you are using any kind of Covid-related assistance you should be very mindful of the conditions that apply to that particular assistance package. We would discourage using loans to meet the costs of Australian-based businesses.

No changes to criteria for New Zealand business loan assistance

The criteria remains the same as previously applied to the Small Business Cash Flow Loan Scheme.

  • It applies to businesses with 50 or fewer full-time equivalent employees
  • the business must have existed prior to 1 April 2020 and can demonstrate a 30% decline in revenue which can be attributed to Covid-19 restrictions
  • the maximum amount that can be borrowed is $10,000 + $1800 per full-time equivalent employee. The employee needs to be resident in New Zealand and be subject to New Zealand PAYE deductions.
  • Only one amount can be drawn down
  • the loan period is for 5 years, and the interest rate applicable to the loan is 3% per annum from the date of the loan being provided. Please note that if the loan is fully repaid within 2 years it will be interest free

What happens if I have a Small Business Cash Flow Loan Scheme under the previous criteria?

When you applied for the Small Business Cash Flow Loan Scheme you will have agreed to certain terms and conditions. These terms and conditions will be automatically updated to reflect the more generous conditions that apply under the new scheme. You do not need to contact Inland Revenue with regard to this.


The information in this article is indicative of NZ tax rules and changes and not intended to be complete for all intents or purposes and does not constitute advice. It is recommended that you obtain professional advice, suited to your particular circumstances, from us before acting on anything you read.