Inland Revenue Covid Small Business Loan
Attention small business owners! If you availed of the Covid-era Small Business Cashflow (SBC) loan, it’s crucial to be aware that the repayment deadline is fast approaching. The Inland Revenue is reminding borrowers that the five-year repayment term for loans initiated in the early months of the scheme is nearing its end, with the cut-off period starting from June this year.
Introduced in May 2020 to support small and medium-sized enterprises during the pandemic, the SBC scheme saw over 129,000 businesses benefit from loans totaling $2.4 billion. The average loan amount was approximately $17,000. However, about 10,000 of these loans are currently in default, amounting to a significant $161 million.
From June onwards, any unpaid loans will be considered in default, triggering additional financial penalties including a default interest rate of 10.88% on top of the standard interest rate of 3%. This could substantially increase the debt owed, making it even more difficult to manage repayments.
Inland Revenue urges all businesses that have taken advantage of the SBC loans to prioritize their repayment plans. For those in danger of defaulting, proactive engagement with the Inland Revenue is advisable to explore possible payment arrangements and avoid further complications.
The agency emphasizes that it is in the best interest of the borrowers to settle their debts promptly, as defaulting could lead to severe consequences, including immediate demands for full repayment and potential legal actions in cases of fraud.
For businesses that successfully navigate their repayment plans, this can mark a positive step towards financial stability post-pandemic. As of the end of last year, more than 50,000 borrowers had already repaid their loans in full.
Business owners are encouraged to visit the Inland Revenue website for more detailed information on repayment terms and to get assistance if they are facing difficulties in meeting their loan obligations. Remember, addressing these debts sooner rather than later can prevent the snowball effect of default interest and preserve your business’s financial health.
Introduced in May 2020 to support small and medium-sized enterprises during the pandemic, the SBC scheme saw over 129,000 businesses benefit from loans totaling $2.4 billion. The average loan amount was approximately $17,000. However, about 10,000 of these loans are currently in default, amounting to a significant $161 million.
From June onwards, any unpaid loans will be considered in default, triggering additional financial penalties including a default interest rate of 10.88% on top of the standard interest rate of 3%. This could substantially increase the debt owed, making it even more difficult to manage repayments.
Inland Revenue urges all businesses that have taken advantage of the SBC loans to prioritize their repayment plans. For those in danger of defaulting, proactive engagement with the Inland Revenue is advisable to explore possible payment arrangements and avoid further complications.
The agency emphasizes that it is in the best interest of the borrowers to settle their debts promptly, as defaulting could lead to severe consequences, including immediate demands for full repayment and potential legal actions in cases of fraud.
For businesses that successfully navigate their repayment plans, this can mark a positive step towards financial stability post-pandemic. As of the end of last year, more than 50,000 borrowers had already repaid their loans in full.
Business owners are encouraged to visit the Inland Revenue website for more detailed information on repayment terms and to get assistance if they are facing difficulties in meeting their loan obligations. Remember, addressing these debts sooner rather than later can prevent the snowball effect of default interest and preserve your business’s financial health.
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