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Government assistance for businesses affected by COVID-19

By Gibson Sheat

Government assistance for businesses affected by COVID-19

25 March 2020
There is an emerging campaign from the Government pushing for a strong recovery post the current lock-down. The “Business Finance Guarantee Scheme” announced by the Government aims to protect jobs and support the economy so that there is a post-COVID-19 economy to look forward to.

The Scheme consists of $6.25 billion available for lending to small and medium-sized businesses. Businesses with an annual turnover between $250,000 and $80 million per annum can borrow up to $500,000 in a single loan from the retail banks. The loan terms are for a maximum of three years and are expected to be provided at competitive and transparent rates by the banks. The credit risk will be allocated 80:20 to the Government and the banks respectively, so this takes a significant risk away from the banks.

If your business has suffered as a result of COVID-19, and is eligible under the requirements of the scheme, you should consider whether you want to use this option of taking on additional debt amongst the smorgasbord of other relief that is being offered. 

If your business turnover falls outside the outer $80 million limit, keep a look out for further news, as the current signals are that the impact COVID-19 will have on larger and more complex businesses will not be ignored. The Reserve Bank has assured larger businesses that the Government will generate schemes tailored to them as well. These will be announced at a later date. We will provide an update when these schemes are announced, but we encourage you to get in contact with Gibson Sheat in the meantime if you need help on existing and looming contractual issues.

If you need advice, or would like to discuss any  business concerns around COVID-19, please contact any of our commercial partners whose contact details are set out below, or call us on 0800 55 44 66 or (04) 496 9990

Nigel Moody | email Nigel | P: 04 916 7465
John Steel | email John | P: 04 916 7495
Nigel Stirling | email Nigel | P: 04 916 7472
Claire Byrne  | email Claire | P: 04 916 7483
Dave Robinson | email Dave | P: 04 916 6307
Mike Gould | email Mike | P: 04 916 6302
Brett Gould | email Brett  | P: 06 370 6475
Rhys Williams | email Rhys | P: 04 916 6452