COVID-19 Business Update – 20 May 2020
Welcome back to our weekly update, we hope you’ve enjoyed the relaxed Level 2 restrictions. Read on for this week’s news.
Last week the budget was announced. Like any budget, there are winners and losers and it will affect businesses, individuals and industries in different ways. You can find more info on the Budget website.
Small Business Cash Flow Loan Scheme (SBCS)
Last week we included details on the recently announced cash flow loan scheme. These one-off loans are designed to help small businesses (including contractors and self-employed), with their cash flow. Applications opened last week for eligible businesses.
The scheme is open for businesses who have 50 or fewer full-time employee equivalents. There is a tool on the government website so you can work out if your business is eligible.
- $10,000 will be provided to eligible businesses, with additional $1800 for full-time employee equivalents
- No repayments required for two years.
There are some finer details, but please contact us if you have any questions.
Temporary loss carry-back scheme
Inland Revenue has some information on the temporary loss carry-back scheme. If your business is expected to make a loss in the 2020 or 2021 year, you can use that loss to offset profits you made the year before. This means you can carry the loss back one year. There are certain requirements to meet for the loss carry-back scheme and you must let the IRD know if you are going to use it. Ask us if you have any questions.
We had great news last week with the move to Level 2 restrictions. At Level 2, the government advises businesses can open if they can do so safely. This is to be self-assessed by the business as to whether it is safe to open or not, but physical distancing and good hygiene need to be enforced.
Is it time to look at your business model?
This pandemic may have shown you some ways you can pivot your business model to adapt to economic turmoil. Exploring new ways to earn money—such as additional revenue streams—can provide your business with financial stability, and help you be successful.
Here are some questions to ask:
- Is my current business model viable following the pandemic?
- If not, are there ways to adjust my business model?
- Can my expertise be used to create additional revenue streams?
- What are current market trends that could affect how I run my business?
- What are my competitors doing to adapt?
Look to businesses similar to yours to see how they’re changing, and how successful their adjustments are. We are more than happy to chat with you to help you “future-proof” your business.
Get in touch with us if you have any questions or want to chat about your business.