Fifth Anniversary Of The SBC Loans
Today (May 12) marks the fifth anniversary of the Small Business Cashflow (Loan) Scheme, and the point where loans should be paid off. The loan was made available to business owners from 12 May 2020 to help small to medium businesses affected by …
Today (May 12) marks the fifth anniversary of the Small Business Cashflow (Loan) Scheme, and the point where loans should be paid off.
The loan was made available to business owners from 12 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.
Most loans were taken out in the first few months of the scheme (May and June of 2020), with a 5-year repayment period. Many are now reaching their cut off point.
From next month, 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 30 April 2025, 64,000 people had repaid their loan in full, with a total loan balance of $853 million still owing. Approx 14,300 customer's loans are in default, owing just over $242 million. IR is actively taking steps to recover these defaulted loans.
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.
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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