Thanks for taking part. And time to pay up. Or else.
Inland Revenue (IR) is warning the many businesses yet to repay money borrowed via the Small Business Cashflow (SBC) loan scheme that they'll face 10.88% default interest from next month.
The SBC was launched in May 2020 to help out businesses affected during the pandemic. Up to $100,000 was potentially available via unsecured loans for businesses with 50 or fewer full-time staff. The loans were interest free if repaid within a year. Thereafter an interest rate of 3% has been charged for a maximum term of five years, with repayments not required for the first two years.
In a statement, IR said Monday (May 12) marked the fifth anniversary of the scheme and therefore the point at which loans should be paid off.
More than 129,000 businesses were issued loans totalling $2.4 billion, with an average amount approved of $17,000.
IR said most loans were taken out in the first few months of the scheme, with a five-year repayment period, so many "are now reaching their cut off point".
As of April 30, 2025, loans had been repaid in full by 64,000 people.
However, a total loan balance of $853 million is still owing. IR says approximately 14,300 customers' loans are already in default, owing just over $242 million.
"IR is actively taking steps to recover these defaulted loans."
From next month, IR will default a loan if it has not been paid off.
"Default interest (calculated based on use of money interest of 10.88% plus standard interest rate of 3%) will be charged."
IR is also alerting customers who are behind on their repayment plan and remind them that repayment is needed.
"Since February this year we’ve tried to contact more than 1,500 customers who have defaulted loans and tax debt. As a result, we’ve recovered almost $10 million of SBC and tax debt from these customers.
"Almost 20% have entered into an arrangement to pay the debt; 30% had a deduction notice placed on their debt to collect it directly from their bank account and 33% have made lump sum payments.
"We are also reiterating that there are consequences, such as default interest being added to the balance and legal action, if the loan remains unpaid."
The statement said customers can also check their loan balance, repayment plan and make payments in their myIR.
For any changes to a repayment plan or any changes in circumstances, customers can also contact IR through the secure channel in their myIR account to discuss options.
10 Comments
If you haven't been able to pay it back, you are either, taking the piss drawing out using cheap funding, or your business unviable.
There must be some rather dumb... okay, optimistic people running businesses, thinking that they would never have to pay their loan back.
There are certainly people who never think about the point in the future where they will have to pay a loan back (some presumably would never have had a loan approved under normal circumstances).
I've pointed a couple of credit controllers in the direction of this article as I can see some more business failures on the horizon.
"some presumably would never have had a loan approved under normal circumstances."
Begs the question of why the government/IRD handed out loans willy nilly in the first place. Use a thorough lending criteria or expect a high default rate. Banking 101.
I guess they were taking a calculated risk by having less checks and balances, given the timeframes.
We all paid for it anyway, one way or the other.
I remember at the time many commentators in Interest & elsewhere stating that Labours helicopter splash of other people's money would serve to sustain many zombie businesses well beyond their use by date.
I’m so sure about the whole ‘zombie’ company thing. How many businesses could survive a government mandated shut down?
My question is why are these loans? If they’ve dictated a shut down of business they owe compensation do they not?
So…. Maybe the shutdown of business was not such a great idea.
Businesses got a compensation for staff.
But yeah, there will be some grift here, but I'd imagine profitability (in order to pay back such a loan) has been fairly elusive for many businesses since COVID. Even if they weathered the shutdowns, the trading environment has been pretty bad.
Thanks for taking part. And time to pay up. Haven't we already paid up? Time for some accountability from our leaders? Even some basic health data would be nice/ethical. Pretty dark that the only people held accountable are borrowers who had their basic human rights trashed, the 2017 pandemic plan ignored, in the name of a bad flu season.
"Objective To examine the relative impact of the initial series of the messenger RNA (mRNA) BNT162b2 (Pfizer) and mRNA-1273 (Moderna) on all-cause and non-COVID-19 mortality
Results
Compared with mRNA-1273 recipients, BNT162b2 recipients had significantly higher risk for all-cause mortality 847.2 vs. 617.9 deaths per 100,000
cardiovascular mortality 248.7 vs. 162.4 deaths per 100,000 persons
COVID-19 mortality 55.5 vs. 29.5 deaths per 100,000
non-COVID-19 mortality 791.6 vs. 588.4 deaths per 100,000 persons
Conclusion 9,162,484 Florida adults who received BNT162b2 had significantly higher risk of 12-month all-cause, cardiovascular, COVID-19, and non-COVID-19 mortality compared to matched mRNA-1273 recipients.
The increase in mortality risk was most pronounced among vaccine recipients over 60 years of age.
These findings are suggestive of differential non-specific effects of the BNT162b2 and mRNA-1273 COVID-19 vaccines, and potential concerning adverse effects on all-cause and cardiovascular mortality. They underscore the need to evaluate vaccines using clinical endpoints that extend beyond their targeted diseases."
https://www.medrxiv.org/content/10.1101/2025.04.25.25326460v1
Are they referring to individuals or companies?
The article makes it sound like both, but I assume companies. This made it confusing:
As of April 30, 2025, loans had been repaid in full by 64,000 people.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.