New Zealand’s retail banks are offering a range of relief options to small business customers financially affected by the Covid-19 pandemic, including interest-only loan repayments or temporarily deferring all loan repayments in some cases.
“There are many small businesses that are being severely impacted by Covid-19. Quite a few of them are sole traders. They make up an incredibly important part of the New Zealand economy.
“Banks are offering a range of options to small business owners that may help with their particular circumstances,” says New Zealand Bankers’ Association chief executive Roger Beaumont.
“Some small business owners who are affected by Covid-19 may be able to move to interest-only repayments on their loans to help get them through or temporarily defer all loan repayments.
“Your bank can help you work through relief options that best meet your particular circumstances. For example, moving to interest-only repayments may work well for some, while, where eligible, deferring all loan repayments may work better for others in immediate need.
“Any small business owner seeking to make changes to their lending needs to be clear about what this means for them. For loan repayment deferrals in particular, it’s important to note that interest on these loans will still accrue, and deferred interest will be added to the principal amount of the loan.
“Loan repayment deferrals are not ‘holidays’. That’s not an accurate description and may mislead some customers.
“We encourage small business owners to contact their bank as soon as they have concerns about their financial position. Business owners will be the first to know how they’re doing. The sooner you contact your bank, the better placed they are to offer practical support.”
More information about options for small business customers is available on bank websites.
Small business relief options that banks may offer include:
- Restructuring loans to reduce repayments, for example extending the term of the loan, temporarily moving to interest only repayments, and in some cases deferring all repayments temporarily
- Providing new business loans, including loans under the Business Finance Guarantee Scheme
- Deferring mortgage repayments for up to six months
- Consolidating loans to help make repayments more manageable
- Providing access to short-term funding.
More information about how banks are helping customers through Covid-19 is available at: https://www.nzba.org.nz/consumer-information/covid-19/banking-industry-response-to-covid-19/.
The latest data on how banks are supporting businesses through the pandemic is available here: https://www.nzba.org.nz/consumer-information/covid-19/business-lending-data/.
Other relief available to small business owners through government initiatives includes:
- Employer Wage Subsidy Scheme
- Tax relief for businesses
- Redundancy Support
- Information for sole traders.
Further useful financial support information is available on the official Covid-19 website at: https://covid19.govt.nz/individuals-and-households/financial-support/.