We recently had a personal meeting with the Inland Revenue Department (IRD) who reminded us of the importance of informing our clients about their Small Business Cashflow Scheme (SBCS) loan repayment obligations. As a result, we would like to share with you some key information about the SBCS loan repayments, which may be relevant to your business.
While the SBCS loan is interest-free, it is not a grant, and the loan repayments will eventually become due. If you have received an SBCS loan, it's important to be aware of your repayment obligations and plan accordingly.
What if I do not have the funds to pay back the loan?
In our personal meeting with the IRD, they stressed the importance of keeping up with your SBCS loan repayments. Failure to do so can result in additional late fees, penalties, and interest charges. If you're struggling to make your SBCS loan repayments, the IRD advises that you get in touch with them as soon as possible to discuss your options. The IRD is open to arranging new payment terms with businesses, which can help to avoid these additional charges.
If I arrange monthly payment terms with the IRD will interest be charged?
It's also worth noting that even if you arrange monthly payment terms with the IRD, interest will be charged if your interest-free period has passed. The current interest rate charged is 3%. Therefore, it's essential to keep track of your SBCS loan repayments and ensure that you make them on time.
What happens if I do not make any payments or contact the IRD?
If you do not make any loan repayments or contact the IRD, the loan will default, and the IRD will seek a full repayment immediately. This will result in additional late fees, penalties, and interest charges. Therefore, it's crucial to keep on top of your SBCS loan repayments and communicate with the IRD if you're struggling to meet your repayment obligations.
In conclusion, the SBCS loan has been a lifeline for many small businesses during these challenging times. However, it's important to remember that the loan will eventually need to be repaid. By staying on top of your loan repayments and communicating with the IRD, you can avoid unnecessary penalties and charges and keep your business financially healthy.
If you need help with negotiating with the IRD please contact us on 021-449-298