In a recent interview on The Mike Hosking Breakfast, Chris Small, Managing Director of ABC Business Sales, shed light on a pressing issue for New Zealand businesses—the nearly $1 billion still outstanding in COVID-era Small Business Cashflow Scheme loans.
The government initially provided these loans as a lifeline to small businesses during the pandemic, with approximately 130,000 businesses borrowing a total of $2.4 billion. However, as the June 2025 deadline for repayment approaches, concerns are mounting about the potential for widespread defaults.
Small pointed out that many businesses have yet to start repaying their loans, and with no personal guarantees or general security agreements tied to them, some owners may simply choose not to repay. He described the scheme as a "free hit" for businesses, suggesting that the lack of enforcement mechanisms may result in the government having to write off a significant portion of the debt.
With financial pressures still weighing heavily on many businesses, particularly in the hospitality and retail sectors, Small emphasised the importance of preparing for repayments now rather than waiting until the deadline looms closer. He also noted that some businesses may need to consider alternative financing options if they are unable to meet the repayment terms.
As the deadline nears, the government may need to decide whether to take a hardline approach to collecting the outstanding debt or offer further relief measures to struggling businesses. Either way, this issue is likely to remain a major talking point in the coming months.
For business owners, now is the time to review their financial position, explore repayment options, and seek advice if needed to avoid being caught out when June arrives.
Listen to the interview here: