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Small Business Cash Flow (Loan) Scheme (SBCS)

24 November 2020 / By RightWay

The Small Business Cash Flow (Loan) Scheme (SBCS) was introduced to support businesses and organisations struggling because of loss of actual or predicted revenue as a result of COVID-19. The Government made a few updates to the scheme which includes an extension on applying for the loan, the no interest period has been extended, and restrictions on how the loan can be used have been eased. All these changes will apply to businesses who already have the loan, you should see your terms and conditions updated by the end of 2020.



If your business is eligible, you can get an interest-free loan up to $10,000 + $1,800 per full-time equivalent employee. The loan is interest-free if repaid within two years, after that you will be charged 3% interest on the loan from day one. You can arrange to have no repayments within the first two years, but the loan must be repaid within five years. You can use the loan on your businesses operating expenses and capital expenditure.

This could be an essential cash injection for your business as you’re trying to get back on your feet from COVID-19, but we do want to advise a bit of caution. As with any lending, you shouldn’t be looking at this as the solution to all of your problems. We strongly suggest you look at the big picture and assess where you are at in all areas of your business to make sure you have a really clear picture of your true financial situation.


To be eligible for the loan you need to show a revenue drop of 30% from COVID-19 - this is the same criteria as the Government wage subsidy. You must have 50 or fewer full-time equivalent employees, been in business since before April 1 2020, and your business needs to be viable with a plan to ensure it remains viable. That means you will need to supply evidence at some point to IRD to show how you’re going to continue operating and paying the debt.

The evidence you may need to supply could include:

  • a cash flow forecast for the short term
  • a plan for where revenue will come from in future market conditions, and a forecast of those revenues
  • financial statements showing your business has enough resources to sustain itself once you get the loan
  • your accountant’s assessment that your business is viable and ongoing.


We strongly recommend you work with your business advisor on whether this loan is the right decision for you. Get a cash flow forecast for your business put together as there might be other solutions before needing to take on debt. RightWay is a registered service provider with the Regional Business Partner Network, which means you could apply for funding to get a cash flow forecast put together, but without any additional costs to you.

The first step is to reach out to your accountant or business advisor and get some advice on your situation, and how you can make it work with or without borrowing. We have a team of Business Partner's here to help you and your business. Or you can go directly to the IRD website for all the details and to apply. You have until December 31 2023 to apply for the loan.

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