April Tip Bits#2
Business Finance Guarantee Scheme (BFGS) Launched
As you know on 1st April the minister of Finance, released further details of the BFGS which forms part of a range of package reforms to support the NZ economy during the COVID-19 pandemic. Click below to see the full details.
The banks have now all launched their applications forms. They have not yet given away any business loans despite over 700 applications because all the details of the scheme with the government are still being worked out. There is over 6.2 billion dollars available to be lent. As your accountants we would like those of you who are impacted to discuss your loan application with us before you apply. There are some very attractive provisions to these loans which are not advertised. As your accountants please be assured that we are attending webinars and learning information about criteria required to be approved – from the banks that you may not be aware of. We are also aware of some “fish hooks” that we want you to know about before you apply. These loans are not available to sole traders in business. However, if you are a sole trader in a company with the turnover over $250,000 you may apply.
The loans will be available until – 30 September – so if your cashflow is ok right now due to the wage subsidy and savings then this does give us a few weeks to get your 2020 financial accounts done. We can then show the bank the changes from last year to this year and apply for the funding using updated cashflow forecast and business plans – with the details on how you are actually planning to make the money to pay the loan back. You will have 90 days from the first drawdown of funds before you have to make the first payment on the 3 year term loan. This loan does have to be repaid it is not a subsidy.
The usual lending criteria also apply – however if your business was trading profitably but now isn’t due to losses from this virus you will still be able to apply! The aim is that your business can continue to pay your usual OPEX costs including rent, wages, subscriptions, tax instalments etc. Banks will not be approving loan applications with the same speed that the MSD gave out the wage subsidies, they will be taking care to ensure that they understand how and when the business is going to be able to be profitable in the future. The banks and we as your accountants want a detailed and careful application that ticks all the bank’s criteria and is accepted and approved rather than declined.
Contact us now to get the applications started.
Planning For Success
We recommend all businesses that have been impacted by Covid19 to attend this workshop series and we have a number of dates and times to choose from. It will require 4 hours of group/ webinar type learning plus 4 hours over 4 weeks individual chats with you as well as some homework from you.
We want to provide you with a rapid response and tools regarding COVID-19, to focus your efforts on helping you to do the most impactful activities and get you back to serving your customers.
Best of all our team will help you to access 100% funding for this extra accountancy coaching service so that there is no cost to you apart from your time investment. If you want to know more and to schedule a time for a facilitator to call back to discuss the details please email.
Insolvency relief for NZ businesses impacted by COVID-19