Cashflow help welcomed by SMEs
May 01, 2020
The EMA says its members will welcome the Government’s announcement of the Small Business Cashflow Loan Scheme, which will definitely help some survive.
Chief Executive Brett O’Riley says businesses certainly need the $10,000 for every company and additional $1800 for each equivalent full time employee offered under the scheme.
“The terms of this scheme are very similar to the Canadian approach which we and the other members of the BusinessNZ Network encouraged the Government to look at, and the fact that they are interest-free if paid back in a year is very helpful. We thank the Minister of Finance Grant Robertson for this response” he says.
“Even with other Government assistance, we know our smaller members are really struggling to cover their fixed costs with no cash-flow during Alert Level 4 or Alert Level 3.”
The EMA reiterates though that the solution to the cashflow problem is actually allowing people to get back to business, within health and safety guidelines.
Applications are being taken for the loan scheme from May 12, by which time we believe the country should have also returned to Alert Level 2, says Mr O’Riley.
“While $10,000 sounds like a lot of money, recent surveys by the Auckland Business Chamber suggest it is on average less than a month of fixed costs for a small business with less than 20 staff. They need to be able to generate their own cashflow as soon as possible and regenerate their business.”
“The vast majority of businesses are taking a responsible approach to health and safety practices in the workplace, and we can expect that to continue under Level 2,” he says.
“It’s time for business to start recovering its health.”
The EMA welcomed the move to Alert Level 3, and looks forward to confirmation from the Government that they have trust in the people and businesses of New Zealand to also operate responsibly at Alert Level 2 from May 12.