COVID-19 Business Update – 12 February 2021
Welcome back to our Covid Update. Read on for the latest updates and some ideas to help us all move forward.
Short-Term Absence Payment Launched
Starting 9 February 2021, the Short-Term Absence Payment has become available for businesses and self-employed individuals to help them pay their employees who can’t work from home while they wait for their COVID-19 test result.
This involves a one-off payment of $350 for each eligible worker. More details on how to apply can be found here.
New Zealand Approves First COVID-19 Vaccine
New Zealand’s medicines regulator, Medsafe, has approved the Pfizer/BioNTech vaccine for domestic use once it arrives in the country.
The mass vaccination program was planned to start in the third quarter, but the government is anticipating having some doses earlier in order to vaccinate border workers and other front-line staff.
Survey: Investor Confidence Improves
New Zealand investor confidence continues to improve as low interest rates and strong housing and share market recovery boost sentiment, according to the latest ASB Investor Confidence Survey.
The results of the survey shows net investor confidence has climbed from -11% in Q3 2020 to +2% for the three months to December 2020. However, Aucklanders were less optimistic with net -7% compared with +7% for the rest of New Zealand.
NZ Finance Minister: Debt Level $60 Billion Lower Than Expected
The country’s debt level by 2034 is forecasted to be about $60 billion less than previously expected on the back of a strong recovery from the pandemic, according to finance minister Grant Robertson.
Projections using the treasury’s fiscal strategy model show net debt now at 36.5% of GDP in 2034/35. Back in September 2020, projections showed net debt at 48% of GDP in 2034.
The finance minister said the government’s objectives would be to keep Kiwis safe from COVID-19, rebuild from the impacts of the pandemic, and address issues such as housing affordability, child poverty, and climate change.
Business Finance Guarantee Scheme Open Until June
Business Finance Guarantee loans can help small and medium businesses access credit for cashflow, capital assets and projects related to, responding to or recovering from the impacts of COVID-19.
All New Zealand registered banks and non-bank deposit takers (non-banks) are eligible to apply to join the scheme.
Depending on your circumstances, you may be able to access credit from either a participating bank or a non-bank, but not both.
If you borrow from a bank, it will determine the amount you can borrow and the length of the term up to a maximum of $5 million payable in five years. Meanwhile, if you borrow from a non-bank, the maximum amount is $3 million payable in five years. More information on eligibility criteria and how it works can be found here.
Applications for Business Finance Guarantee loans are open until 30 June 2021. If you need assistance or have any questions, don’t hesitate to drop us a message.
Small Business Cashflow Scheme Extended Until 2023
The Small Business Cashflow (loan) Scheme has been extended until 31 December 2023.
Organisations and small to medium businesses, including sole traders and the self-employed, may be eligible for a one-off loan with a term of 5 years if they have been adversely affected by COVID-19.
The maximum amount loaned is $10,000 plus $1,800 per full-time-equivalent employee. The annual interest rate will be 3% beginning from the date of the loan being provided. Interest will not be charged if the loan is fully paid back within 2 years.
Kiwi Business Boost Tool
The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.
The Treasury website’s COVID-19 Economic Response Measures can also provide more information on the range of supports available to businesses.
When Should I Apply for a Business Loan?
Borrowing money is part of running a company, but it does come with a cost. This means you shouldn’t impulsively take on debt unless there’s a clear benefit for doing so.
Below are the top valid reasons for getting a business loan:
- Opportunity to expand your business– Whether it’s for hiring new staff, developing a new product, or launching a new marketing initiative, if it will help you grow your future revenues, it is a smart time to get a loan.
- Replace, repair, or upgrade equipment or systems– It is sometimes difficult to finance new business assets such as equipment, service vehicles, and systems out of your existing cash. A business loan can be used to cover these investments and help you improve your products or services.
- Refinance existing debt– If you already have a business loan, you may qualify for better terms now compared to when you first borrowed. Refinancing to a better rate will let you enjoy lower monthly payments while covering your debt.
If you require some guidance on deciding what type of business loan to apply for, or need some help with the completion of your requirements, don’t hesitate to get in touch with us.
3 Ways Busy Entrepreneurs Can Save Time
As a small business ourselves, we understand how hectic your day-to-day operations can get. Given there will never be more than 24 hours in a day, we’ll share some effective tips to help you accomplish more and save time to do the things you love.
As a business leader, one of the key skills you need to learn is delegation. Small business owners tend to think that no one can do the job as well as they can.
However, wearing too many hats may mean something important could fall through the cracks. So learn which ones to delegate based on your employees’ skills and focus on the core aspects of your business.
Use the power of technology
In the modern business landscape, cloud-based systems and apps are your bestfriends. When used properly, they can simplify and streamline processes, helping you get the job done with ease. Research on the best tools that can automate repetitive tasks and have more time in your hands.
Outsourcing is a more cost-effective approach to expanding your team compared to hiring an in-house staff. When you outsource non-core yet essential tasks, you’re allowing yourself to focus on what you do best, like growing your business.
If you want to learn more about how our advisors can help ease your burden, get in touch with us today!
Get in touch
Contact us if you have any questions or want to discuss the next steps for your business.