NEW ZEALAND COVID-19 BUSINESS ASSISTANCE

Assistance for New Zealand businesses financially impacted by COVID-19. By Sam Bassett – Moore Markhams.

Moore Markhams Auckland director, Sam Bassett outlines the government’s financial and business assistance options available to NZ business owners to get through the coming months in a much-altered economic environment.

1WAGES SUBSIDY

Businesses will be eligible for the subsidy where they have experienced a 30 percent decline in actual or predicted revenue related to COVID-19.

Before receiving a subsidy, you must take active steps to manage the implications of COVID-19 on your business. This might include talking with your bank, making an insurance claim, or activating your business continuity plan.

The wage subsidy supports businesses and their staff to maintain an employment connection – so employers can continue to pay employees and workers can receive an income, even if they aren’t able to work.

Use the Wage subsidy eligibility tool to assess your eligibility.

Apply for the Wage subsidy scheme on the Work and Income website. They will verify the information you provide in your application with Inland Revenue so ensure your IR details are up to date before applying for the subsidy – you can check online at the Inland Revenue website.

Moore Markhams has prepared a guide to answer payroll queries around the treatment of the wages subsidy.

2BUSINESS FINANCE GUARANTEE SCHEME

The Government’s Business Finance Guarantee Scheme is a collaborative approach between the banks and the government to support businesses with additional funding to cover any cash losses that are built up during COVID-19 recovery.

The scheme is available if you have an annual revenue between $250,000 and $80 million. You can apply to your bank for a loan up to $500,000, for up to three years. These loans will be expected to be repaid when your business is back on its feet and trading profitably or is back to similar financial performance prior to COVID-19.

To access this funding, banks will require this information to support an application: l the last three years of financials showing business viability and profitability prior to COVID-19. l your cash-flow budget for 12 months showing funding needs during and after COVID-19. l a Statement of Position that lists your personal assets and liabilities.

3SUPPORT FROM YOUR BANK

Your bank’s care packages should be your first port of call and considered in advance of the government guarantee option. The programmes on offer include: l an increased temporary overdraft facility for up to three months l discounted interest rates l principal holidays and a move to

‘interest only’ loans l asset finance loans to help fund key items such as plant/machinery/ vehicles l trade finance extension of repayment terms. when the business faces significant liquidity problems. The changes will not cover serious breaches of duty.

The temporary changes include: l giving directors of companies facing significant liquidity problems because of COVID-19 a ‘safe harbour’ from insolvency duties under the Companies Act. l enabling businesses affected by COVID-19 to place existing debts into hibernation until they are able to start trading normally again. l allowing the use of electronic signatures where necessary due to COVID-19 restrictions. l giving the Registrar of Companies the power to temporarily extend deadlines imposed on companies, incorporated societies, charitable trusts and other entities under legislation. l giving temporary relief for entities that are unable to comply with requirements in their constitutions or rules because of COVID-19.

4INSOLVENCY RELIEF

The Government is introducing urgent law changes to the Companies Act to give directors temporary relief from potential personal liability

5INCREASED BUSINESS SUPPORT

Government announced a further $25 million in funding for the Regional Business Partner Network (RBPN). Approximately $4 million will go to help strengthen call centres to ensure more people can access the service quickly.

Roughly $20 million will be invested in the direct business consultancy services to ensure that a wider range of businesses can get the support they need.

To find out what support is available for your business, visit the Regional Business Partner Network website

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