The Government's Business Finance Guarantee Scheme (the ‘scheme'), enables some businesses (Government-defined eligibility criteria applies) with annual revenue up to NZD 200 million to apply to participating banks for loans of up to NZD 5,000,000 for up to five years.
ANZ is a participating bank in the scheme, following a normal lending process to make lending decisions according to the eligibility criteria set by the Government. Like any loan, businesses are required to repay a loan taken out under the scheme. Interest, standard fees and credit criteria apply.
While the scheme will provide necessary support for eligible businesses, it is important to note that additional funding will add to the costs of running your business and will need to repaid within a maximum term of five years, so should be considered carefully and factored into your business plans.
As part of updating your plans consider:
- What a return to more normal business might look like over 2-3 years.
- Assumptions made to estimate these impacts.
- All additional measures available to the business, including other Government support options, reduced operating expenses (for example, reduced or deferred costs, distribution) and any additional sources of income and/or capital.
To find out if you are eligible to apply for a loan under the scheme, take a look at the criteria below.
Eligibility criteria for the Business Finance Guarantee Scheme
Your business may be eligible to apply for a loan under the scheme if it:
- had, at the end of its most recently completed financial year (or, if your business has been operating for less than one full financial year, expects to have in its first full financial year) revenue of up to $200,000,000 (determined on a consolidated basis if the business is a member of a guaranteeing group);
- is a New Zealand-based business and does not involve an activity that is excluded under the scheme;
- is not a local authority, a council-controlled organisation or a council organisation for the purposes of the Local Government Act 2002; and
- requires the loan for the purpose of responding to, positioning itself to recover from; or recovering from, the impacts of COVID-19.
Additional eligibility criteria under the scheme and ANZ lending criteria, fees and terms and conditions apply. You will be required to provide security to ANZ if sufficient security is not already held.
In assessing your application, ANZ will need to look at the impact of COVID-19 on your business operations, its trading position before the COVID-19 crisis, and your plan for when the country returns to something resembling normality.
If your application is approved, you will need to certify to ANZ that each of the above statements in relation to your business is correct.
A loan taken out under the scheme:
- Can only be used for the purpose of responding to, positioning itself to recover from; or recovering from, the impacts of COVID-19, and not for any excluded purpose or excluded activity.
- A business and its guaranteeing group may not at any time while it has a supported loan from ANZ, apply for a loan covered by the scheme from any other bank.
- Will be provided as a Term Loan and with the repayment options of either a principal and interest for the full loan term or interest only for 6 or 12 months followed by principal & interest for the remaining term of the loan.
Definitions for clarification
Guaranteeing group means the borrower and each person (if any) that has provided a guarantee to ANZ in relation to the borrower’s obligations.
New Zealand-based business means a business in respect of which, if carried on by:
- an individual or a company, the individual or the company is resident in New Zealand for the purposes of the Income Tax Act 2007, or
- a company or partnership (including a limited partnership) or trustees of a trust (in each case whether or not formed or incorporated in New Zealand), the relevant entity or body of persons (i) is or are resident in New Zealand for the purposes of the Income Tax Act 2007; or (ii) carry or carries on business in New Zealand through a fixed or permanent place of business in New Zealand and will file a New Zealand income tax return in respect of that business.
Excluded activities under the scheme are:
- Manufacturing or testing cluster munitions, anti-personnel mines, or nuclear explosive devices
- Manufacturing tobacco
- Processing whale meat
- Manufacturing or distribution of recreational cannabis
- Manufacturing civilian automatic and semi-automatic firearms, magazines, or parts
- any activity which is illegal in New Zealand
An excluded purpose under the scheme is accessing a loan for the purpose of:
- funding dividends to be distributed outside the applicant’s guaranteeing group
- funding on-lending outside the applicant’s guaranteeing group
- funding any purpose related to an excluded activity
- funding residential or commercial property development or investment.
- refinancing existing facilities over specific limits (contact us for more information)
Applying for a loan under the scheme
If you believe your business meets the criteria outlined above, it may be eligible for a loan under the Government’s Business Finance Guarantee Scheme.
Contact your Banking Manager or Relationship Manager to discuss your eligibility, or call our Contact Centre: