close
Share with your friends

New Zealand: Inland Revenue to administer small business loan program (COVID-19)

New Zealand: Small business loan program (COVID-19)

A small business cash-flow loan scheme (program) is one governmental response to the coronavirus (COVID-19) pandemic.

1000

Related content

The administrative mechanics of the loan program are included in the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 that was passed yesterday.

Inland Revenue will administer the loan program. Key features of the loan program include the following:

  • Loans are provided for up to $100,000* to firms employing 50 or fewer full-time equivalent employees (the loan amount is calculated as $10,000 for an applicant plus $1,800 per full-time employee).
  • Eligibility criteria are:
  • The wage subsidy scheme criteria, plus
  • A declaration that the business is viable and will use the money for core business operating costs.
  • The business and Inland Revenue will have a legally binding loan contract.
  • The loan will be for a maximum five years, with repayments not due in the first two years.
  • No interest is charged if the loan is repaid within the first year. A 3% interest rate applies otherwise.
  • Inland Revenue will administer and audit the loan program.
  • Applications to participate in the program open 12 May 2020.

The legislation passed yesterday contains specific provisions relating to administration of the loan program. A decision to grant (or decline) a loan will not be disputable and information can be shared with the Ministry of Social Development (the agency administering the wage subsidy).


Read a May 2020 report prepared by the KPMG member firm in New Zealand


*$=New Zealand dollar

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal