Two changes to the Small Business Cashflow Scheme (SBCS) came into effect on Monday 21 March 2022.
The first relates to existing loans. Previously, interest was to be charged from the first day of the loan, if the loan was not repaid in within 24 months. This has now been changed to interest only being charged from the first day after 24 months, provided the loan is not in default. A loan is considered to be in default if the repayment plan is not being followed.
We assume IR will be communicating the repayment applicable before it is required to start, but our understanding is that you will need to be making 36 monthly instalments to repay the loan and current interest in full.
The second change relates to the amount that can be borrowed. Previously, the limit was $10,000 plus $1800 full-time employee (up to 50 employees). The limit has increased to $20,000 with the same per employee amount.
So, if you qualify to apply for the loan, you can now draw down a larger loan, and if you have already drawn down on the original loan and you still qualify, then you can now apply for an additional draw down. This additional draw down will be recorded as a separate loan with the first two years interest-free, provided repayments are not in default at the time they need to start.
Applications open until 31 December 2023. Learn more and apply here.