Maximum loan size of the Small Business Cashflow Scheme (SBCS)

The maximum size of the loan your business or organisation is eligible for depends on the number of full-time equivalent employees (FTEs) employed. The loan amount is a base rate of $20,000 per firm, plus $1,800 per FTE (up to 50 FTE).

To find out the number of FTEs employed by your business or organisation, you'll need to know how many full-time and part-time employees you have.

An employee working 20 hours or more per week is considered full-time and counts as 1 FTE.
An employee working up to 20 hours per week is considered part-time and counts as 0.6 FTEs.

The sum of your FTEs is rounded up to the nearest whole number and is measured at the time you apply.

Receiving the Small Business Cashflow Scheme loan

The maximum loan your business or organisation can receive is $100,000. Sole traders can receive a loan of up to $11,800. From 21 March 2022 the maximum loan size is $110,000 and for sole traders the maximum loan amount will be $21,800.

When you apply for the loan, we will offer your business or organisation a maximum loan amount. For loans applied for from 21 March 2022 you will have the option to draw down the maximum loan amount as a lump sum or opt to take the loan in up to 4 separate amounts (up to the maximum loan amount) which must be drawn down before 31 December 2023.

If you have borrowed a loan and repaid it in full before 31 December 2023, you can apply for a second loan, provided you meet the eligibility criteria. If there has been any default on a prior SBCS loan you will not be eligible for a second loan.

Receiving a top-up loan

If you are an existing borrower and already have a SBCS loan (and have not defaulted on this loan) you may be able to apply for a top up loan. The amount of the top up loan is $10,000, plus any amount which was available at the time of taking your existing SBCS loan which you did not take at the time. The top up loan can be drawn down as a lump sum or as up to 4 separate amounts (up to the maximum loan amount) before the end of the scheme on 31 December 2023.

The top up loan is a separate loan from your existing SBCS loan and has its own 5-year term and 2-year interest free period.

If you default on your loan

You are not eligible for a top up loan or a second loan (including further drawdowns) if you have defaulted on any previous SBCS loan, even if the default has been remedied to the Commissioner’s satisfaction.

Events of default are defined under Clause 9 of the SBCS Terms and Conditions (a copy of which is provided to you as part of the SBCS loan application). The most common events of default include:

failure to pay any loan amount due by its due date
ceasing to carry on the business for which the loan was provided
a false or misleading statement or declaration was made in the loan application.

Events of default can occur at any time after the borrower enters the SBCS loan contract, either at the time of making the declarations, if the declarations are untrue or at a later point in time, for example, a borrower receives the loan and later ceases to carry on the business for which the loan was provided or uses the loan amount on non-business expenses.

Mr Green applies for the SBCS loan on the basis he carries on an uber driving business in New Zealand. However, at the time he applied for the loan he was living in Australia. The SBCS loan application includes a declaration that at the time the application is made the applicant is physically located and legally working in New Zealand. A false declaration has been made by Mr Green and an event of default has occurred meaning the loan is immediately repayable and default interest applies from the loan date.

Blue Limited carries on a painting business and applies for a loan in May 2020 which is approved. Twenty-four months after the loan is received repayments are due as per the SBCS Loan Terms and Conditions. Blue Limited stops making repayments 30 months after the loan is received meaning an event of default has occurred under clause 9.1(a). Blue Limited and the Commissioner agree to reschedule the payments (including the accumulated default interest) and the default is remedied. At the end of December 2022, Blue Limited applies for a top up loan of $10,000. The top up is declined as Blue Limited has defaulted on its existing SBCS loan, despite the default having been remedied.