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New Zealand business Covid 19 Relief Options Update

New Zealand business Covid 19 Relief Options Update

COVID-19 Business Relief Options announced by the Government have recently been extended for any New Zealand business that is currently facing a financial hardship.

Read on to find out what relief option your business might qualify for.

N.B. Wages Subsidies are now closed

Insolvency relief for companies impacted by COVID-19

The Government introduced new legislation to make changes to the Companies Act to help businesses facing insolvency due to COVID-19 to remain viable, with the aim of keeping New Zealanders in jobs.

COVID-19 New Zealand Business Finance Guarantee Scheme

The Government launched a Business Finance Guarantee Scheme for small and medium-sized businesses, to protect jobs and support the economy.

The Crown, in partnership with participating approved banks, will support targeted new loans (including increases to existing limits) to eligible businesses, as a response to difficulties caused by COVID-19.

Under the scheme, New Zealand businesses with annual revenue up to $200m can apply to their banks for loans up to $5,000,000, for up to five years.

The length of time should help New Zealand business to plan for the longer-term without huge financial pressure.

The scheme is open for applications until 31 December 2020

Key information

The purpose of these loans is to help New Zealand businesses facing hardship as a consequence of COVID-19 to do one or more of the following:

  • To respond to the impacts of COVID-19;
  • To position themselves for recovery from the impacts of COVID-19; or
  • To recover from the impacts of COVID-19.
  • Maximum loan per eligible business up to $5,000,000.
  • The loan is for a maximum of 5 years and must be repaid over this time period.
  • Please note this is a loan and will add to the costs of running your business. As with any other loan, you remain responsible for repaying 100% of the loan and interest. You should not apply for an amount that you cannot afford to repay.

The New Zealand Business Finance Guarantee Scheme cannot be used for

  • Distribution of dividends or on-lending outside the customer’s guaranteeing group
  • Refinancing more than 20% of your existing debt with us. There are certain exceptions to the 20% limit

Industry exclusions

New Zealand Business Finance Guarantee Scheme Loans are not available to:

  • a local authority, a council-controlled organisation or a council organisation for the purposes of the Local Government Act 2002; or
  • anyone who is classified by us in the follow categories: residential property investor or developer and commercial property investor or developer.
  • The manufacture or distribution of recreational cannabis
  • The processing of whale meat
  • The manufacture of cluster munitions, anti-personnel mines, tobacco, and civilian automatic and semi-automatic firearms, magazines or parts
  • The manufacture or testing of nuclear explosive devices
  • Any activity which is illegal in New Zealand

Want help with making an application?  Drop us a line : murray@insightca.nz

Looking for Business Support?  Check out:  Insight CA Better Business Program

Will borrowing funding for my business expose me to greater personal risk?

Will borrowing funding for my business expose me to greater personal risk?

If you go to your bank, yes, your bank will likely require you to secure personal assets (i.e your house) against the loan, exposing your personal assets to risk as the banks want greater security. If you need to borrow funding for business asset purchases, consider using a second-tier lender that secures the funding against the specific asset, or ask your own bank if securing the funding against a specific asset is an option. You’ll pay more in terms of interest, but the risk to you is a risk around that specific asset, not around your house.

If you’re concerned about your personal financial risk as a business owner, please feel free to reach out. I’m only a message or call away (09-309-3222).

Are you working ‘on’ your business or ‘in’ your business?

Are you working ‘on’ your business or ‘in’ your business?

Are you trying to do everything by yourself? How much of what you do could be done by someone else, so that you can focus on your core business activity?

As small business owners we often think we can, or should, do it all ourselves. We have to, right? Often there isn’t a dedicated role or team within our business for each function. Although we sometimes get away with wearing many hats, right now what we actually need to be concentrating on is our core business activity.

The next 6-12 weeks are crucial for the survival of a business, so a lot of these other adjuncts like accounting and marketing have to be, or should be, outsourced so you can focus on getting your business through.

If you want to start working ‘on’, not ‘in’ your business, reach out for a no obligation call or visit our website to find out more about our CFO program.

3 Steps to Success

3 Steps to Success

Are business concerns keeping you awake at night?

Follow these 3 steps to de-risk your business and get a better night’s sleep!

1. Understand the risk and value drivers in your business – read the latest SME research report and then contact Insight CA to complete a Risk Assessment.

2. Collaborate to improve business performance – Share the insights from the report with staff, key stakeholders, your business support network i.e. business coach or advisor. Discuss how these insights could be applied to improve key areas of your business where you have identified risks.

3. Select an accountability partner to support success – Look for an accountability partner with the experience and skill set to act as a sounding board; a second pair of eyes and ears to listen to your challenges and ideas, and point out things you may not have thought of.

Grab your copy of the latest SME research report* to understand some of the risks SMEs are facing, and key insights as to how they are dealing with them, then reach out to discuss next steps on how I can help you on your journey to addressing the concerns keeping you awake at night.

 

Is your business Owner-Proof?

Is your business Owner-Proof?

For many SMEs the business owner(s) are both the key to success and the source of the highest risk. 61% of SMEs report a high – very high degree of owner reliance. So what are they doing about it?

  • Implementing ‘Turnkey’ manuals and systems
  • Putting key customers on 12 month contracts
  • Introducing new websites and e-commerce platforms

What are you doing, or have done, to reduce owner reliance in your business?

For more insights on the risks SMEs are facing, and key ideas for improvement, grab your free copy of our latest SME research report*

If you’re worried about the risks to your business, or want help to implement improvement ideas, please reach out for a no obligation, no cost call.

 

Have you updated your business plan, taking into account the adjustment with COVID-19?

Have you updated your business plan, taking into account the adjustment with COVID-19?

Have you updated your business plan, taking into account the adjustment with COVID-19? While you might have had sales at 100% of anticipation, now you might be putting a Risk component into it. So what happens if we only do 50% of sales? Or 70%? What’s that going to do to 1) profitability 2) liquidity?

Think about:

  • Where are you now?
  • How has Covid-19 adjusted the plan you had, and where you expected to be in the next 3-6 months?
  • If Covid-19 has adjusted your current position, and forecasted path, where do you want to be at a future date?
  • How will you get there?
Check out our article on Business Plans to help you get started.

Do you have a sounding board for your business?

Do you have a sounding board for your business?

A sounding board for your business can make a huge difference to how your business performs because it’ll give independent (and objective) input into how things are going.

Would you value an independent, trusted advisor to discuss the burning issues and opportunities that are keeping you awake at night?

Having someone you trust that you can discuss issues with during times of uncertainty is vital to help develop ideas, solutions, share the load, and reduce stress.

If you’re wondering how to achieve your desired work outcomes to gain the lifestyle you want find out how Insight CA can help

 

How confident are you going forward?

How confident are you going forward?

The next 13 weeks is the vital part of coming out of Covid-19. One of the things I am working with my clients on right now is a daily cash flow plan for the next 13 weeks.

So, here’s a quick tip:

By doing it on a daily basis, as opposed to monthly, this will actually show you where you’re getting tight on cash, and where you might be able to move things around.

Have someone go through at the end of each week, recording the actuals against your expected sales and expenditure, so you can see what is actually happening.

If you’re wondering how to take control of your financial situation right now, and in the coming weeks, one of the services we offer at Insight CA (Auckland) is Financial Awareness Coaching.

Reach out for a no obligation conversation, or visit our website to find out more information about how our coaching service can give you confidence through understanding.

 

Have you made a plan of how your business will handle this crisis?

Have you made a plan of how your business will handle this crisis?

The biggest impacts come from uncontrollable non-financial risks like epidemics (covid-19) and pandemics, and natural disasters.

While each crisis does eventually pass, the businesses that survive are those that have plans in place, or are quick to put them in place.

The best payoff is in sharing the load and reducing your stress; a problem shared is a problem halved. So if you need to make a plan, de-risk your business, or improve your profitability and cash flow, get in touch today.

 

Are you holding on to your cash tighter than usual?

Are you holding on to your cash tighter than usual?

Many businesses that do have cash are hanging onto it.

Governments are trying to keep cash moving by cutting interest rates and printing money through quantitative easing.

Why? Simply put, money, specifically cash, makes the business world go round.

But the cash impact of COVID-19 on small and medium business owners is dramatic.

The Bstar 2020/21 SME Research Report shows that, even before the crisis, 78% of SMEs held either no cash reserves (20%) or ‘limited’ cash reserves (58%).

 

Cash is king. When it comes to ensuring your business not only survives but thrives, it’s the truth. And yet, 15% of SMEs said cash was a continual headache, with 62% reporting medium to high levels of concern.

Business owners need to get ahead of the cash issue and make plans to minimise impacts and risks.

We’re already helping our clients develop strategies and plans to get through this challenging time.

If you’re thinking about restructuring finance arrangements, we can help with putting together a proposal for your bank (or finance partner) and to negotiate new arrangements. Read more key SME insights in our free SME research report

 

Worried about business continuity?Our new SME Research features up-to-date insights to help you de-risk your business.