Accumulus -  July 2020

Interest Free Loans Update

Interest Free Loans - Again

Please note that the final application date for the Covid Small Business Loan has been extended to 24 July 2020 so if you qualified for a wage subsidy and have not yet applied for a loan the opportunity to apply is still there for another three weeks.

The rest of this email is a repeat of what we sent out when the scheme first became available.


The Government is providing Small Business Loans "SBC" (the C is for cashflow) for a term of up to five years for businesses or organisations with 50 or fewer employees.

The loans are available to any individual or entity that qualified for a wage subsidy.

The annual interest rate is 3% but they are interest free if repaid within a year, (but the first year bears interest if it is not repaid within the first year).

The amount of the loan is $10,000 plus $1,800 for each full time equivalent employee.

ie between $11,800 for one "employee" and $100,000 for 50 employees.

The number is based on the wage subsidy application and is given automatically in the application "form".

Applications are made by going into MYIR for the entity (IRD number) that received the wage subsidy.  On the front page in the "I want to…" section there is an option "Apply for a Small Business Loan".

If you complete and submit the "form" payment should be made within 5 days and the loan contract with the terms should be received within 5 to 10 days.

The loan effectively becomes repayable if the business:

-       ceases or is sold,

-       does not qualify for a wage subsidy (although it received one),

-       does not use the loan in the business as warranted in the application.

The default interest rate is the IRD Use of Money interest rate plus 3%.


The whole set up looks better thought through than the wage subsidy scheme which was obviously set up in a huge rush with instructions changing over time.

There is every reason for eligible businesses to apply for the loan, but please remember it is a loan and will have to be repaid.

As ever please get in touch with us if you need any assistance.




The Team at Accumulus