“It could have been a grant but it’s a good start, and recognised that more help is needed urgently,” says Auckland Business Chamber CEO, Michael Barnett of Government stepping up to provide interest-free loans of up to $100,000 to small businesses struggling to survive from the devastating impacts of Covid-19.
“This cashflow loan scheme is welcome and better late than never,” Mr Barnett said. “The small and medium business sector is too big to fail.
“Cash flow is the biggest issue for the 500,000 small and medium enterprises in New Zealand locked down and locked out of their businesses during Level 4,” Mr Barnett said.
“They have rents to pay and overheads that will not go away and the last thing they need to do is take on more debt, no matter how attractive the offer may seem. I would hope that Government will play a long game, make this loan scheme simple, easily accessible and consider forgiving the debt to build recovery and confidence to revitalise the business to create and sustain employment in the community,” he said.
The latest survey by the Auckland Business Chamber of small and medium enterprises shows that regardless of how many employees that overheads ranging from bank interest to supplies to wages to insurances, ACC and utilities- are double the cost of rents. A company employing under 20 full timers pays an average of about $7,000 in monthly rent but over $13,000 is eaten by overheads which cannot be negotiated.
“Businesses emerging from lockdown to a new environment with consumer sentiment extremely cautious and operations restricted will need continuous help to sustain their livelihoods and continue to contribute to the community and national economy,” he said.
This article was originally published on 1 May 2020 at https://www.aucklandchamber.co.nz/media/chamber-media-releases/keep-it-coming-so-small-and-medium-businesses-can-rebuild/