Free money – is there a catch? Most people think there is no such thing as a free lunch and there must be a catch. But there really is no catch.
The harsh reality is that over 90% of businesses in New Zealand are SMEs, and the majority of those businesses will be affected by the Covid-19 crisis. The funding support being offered by the Government is to help your business survive. If your business survives, it will mean less people claiming unemployment benefit.
As a result of Covid-19, the number of unemployed people in New Zealand is expected to exceed 13%, so it is in the Government’s best interest to keep that number as low as possible and thereby reduce the ongoing social cost associated with unemployment, which would far outweigh the funding being provided to help your business survive.
There’s no brick under the hat here.
The Government really does want to give you free money.
On the 15th April the Government announced they were putting another $24 million dollars (up from the original $4 million) into funding Business Advisors to support small and medium businesses (SMEs) through the Covid-19 crisis. Additionally, they announced an extension of the funding period – originally due to expire on 30th June 2020 – for another 24 months. The reason for the increased funding and the time extension is that Government originally underestimated the requirements not only of businesses but also of the business owners themselves; for instance:
- Health and Wellbeing – Business owners need to be able to discuss their business issues and how it is personally affecting them, with someone who understands both business and people. Ideally, this will be a Business Advisor like myself who can come up with solutions on the fly to ease the immediate pain plus help develop business and marketing plans to meet the new market conditions imposed on the NZ economy by Covid-19.
- Planning to re-open on a new playing field in a different park. Many businesses will need to come up with a brand-new marketing strategy that enables them to operate in an environment that will be a combination of new and smaller market segments alongside unemployment levels of 13%+.
- Business owners need to be able to work through the endless updates to the available options for easing cash flow. As a Business Advisor, I have my finger firmly on the pulse; for example, it has only very recently been clarified that there will be no blanket relief from penalty tax for late payment of provisional tax or GST. It is up to each individual business to apply to the IRD for a remission of these costs. The Inland Revenue has been given discretionary powers.
- Help with HR issues. Many businesses will need to reduce in size to cope with the ongoing Covid-19 environment.
So, how do I get my hands on this free money that comes with no strings attached?
Well, to help businesses to initially survive and then potentially grow, the Government, as mentioned above, has provided funding through the Regional Business Partnership Network (RBPN) to fully fund Business Advisors up to $2,000 for Covid-19 business support. The support is to cover one or more of the following areas:
- Heath & Wellbeing
- Business Continuity Planning
- Financial and Cashflow Management
Additionally, if you require more Business Advisor support, co-funding is also available through other Business Advisor services. To access this funding, your business must be registered with the RBPN, who, to make the process as simple as possible, have provided a special link for Covid-19 https://app.regionalbusinesspartners.co.nz/Business/SelfRegister
Please note: Not all Business Advisors are equal, and your accountant is not a Business Advisor. To get the best bang for your buck you should ensure that the Business Advisor that you engage can help with all four areas this support is meant to cover.