Final Repayment Date Nears For SBC Loans

The final repayment date is fast approaching for people who borrowed money through the Small Business Cashflow (SBC) loan.

The loans were introduced in May 2020 to help small to medium businesses affected by the COVID-19 pandemic. More than 129,000 businesses were issued loans totalling $2.4 billion. The average amount approved was $17,000.

A high proportion of borrowers are sole traders followed by small businesses employing between 2 and 5 staff (FTE). The highest number of loans were taken out by businesses in Auckland where there were longer lockdown periods.

Most took out a loan in the first few months of the scheme (May and June of 2020) and had 5 years to repay the loan. Many will reach their cut off point from June this year.

From June, Inland Revenue 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.

As of 31 December last year, 51,021 people had repaid their loan in full, with a total loan balance of $953 million still owing. Approx 10,000 loans are already in default, owing just over $161 million. IR is actively taking steps to recover these defaulted loans.

IR will notify customers who are behind on their repayment plan and remind them that repayment is needed. We also let them know there are consequences, such as default interest being added to the balance, if the loan remains unpaid.

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.

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