The government raised the size of loans under the scheme to $5 million
The government has decided to expand the criteria of its Business Finance Guarantee Scheme, raising the size of available loans from $500,000 to $5 million. However, not everyone has welcomed the changes with open arms.
Advisers claimed that the changes to the government's Business Finance Guarantee Scheme made only a small difference to clients, with some finding the application process difficult.
“I have not had any clients take up the scheme. I assisted one client to get the paperwork together to apply through the BNZ, which was not an easy process,” an Auckland-based adviser told Good Returns.
A Wellington-based adviser claimed that a client had to add their partner to their home loan application, which was not in their original plan.
“The key point is that taking that loan can affect personal borrowing requirements. So businesses really need to look at the bigger picture if they take it,” the Wellington-based adviser said.
Read more: Reserve Bank issues warning on banking sector's COVID-19 response
In contrast, the New Zealand Bankers' Association has welcomed the government's latest changes to the Business Finance Guarantee Scheme as they support the supply of credit to businesses in need.
“We think expanding the criteria should make it more relevant for businesses in need at this time,” said New Zealand Bankers' Association chief executive Roger Beaumont.
“Uptake will ultimately be driven by demand from businesses. We encourage businesses looking to borrow to talk to their bank about their eligibility to borrow under the scheme.”
