Banks launch SME support loans

Applications are open for $6.25 billion in funding as part of the government's Business Finance Guarantee Scheme. 

The Scheme will provide loans for small and medium sized enterprises suffering amid the covid-19 outbreak and lockdown.

Banks will be able to provide $500,000 to SMEs to protect jobs and the economy. The government will take on 80% of the risk, with the banks taking the remainder.

The loans come with conditions, however. Businesses will need to prove they have exhausted other options to some banks, and others want financial projections before they will approve financing. 

Westpac wants customers to apply online. 

Westpac's GM of commercial, corporate, and institutional banking, Simon Power, said businesses would need to provide financial projections.  

“Every business will be different. Some will be affected locally by the Level 4 lockdown, while others may be having problems sourcing parts from overseas, or rely on exports to other countries.

“As with any business lending, we still need to understand if each customer will be able to meet their commitments, Power said. "We don’t want to place people under even more financial stress by lending to customers that don’t have a viable way forward.”

ANZ customers are also being asked to apply online. 

"Given the urgency facing many businesses, the bank will work to give customers a decision as soon as possible, although this is likely to take several days," a spokesman said. 

Meanwhile, Kiwibank wants to customers to fill out an online form. 

Chief executive Steve Jurkovich warned not all businesses would qualify for support. 

“Clients must have exhausted existing Kiwibank facilities before accessing the Business Finance Guarantee Scheme. To be eligible to apply to the scheme, businesses must be New Zealand based with an annual turnover between $250,000 and $80 million."