Tonga's wrecked businesses offered subsidy on interest rates [1]
Wednesday, April 4, 2007 - 16:45. Updated on Monday, July 20, 2015 - 12:20.
A business Recovery Facility and a Business Hardship Fund - the first financial schemes to assist businesses that were wrecked by the November 16 riot - were officially launched today, by the Minister for Labour, Commerce and Industries, Hon. Lisiate 'Akolo.
Under the Business Recovery Facility three types of assistance will be given to the 157 businesses that were directly affected by the riot. They are an Interest Rate Subsidy Scheme, a Credit Guarantee Scheme and a Business Advisory Scheme.
The Interest Rate Subsidy Scheme offers interest rate subsidy for a period of two years of eight percent in the first year, then reducing to four percent in the second year. The subsidies will be provided up to a maximum of $300,000 per business, regardless of the size of the loan.
The Credit Guarantee Scheme applies to loans up to $50,000 pa'anga. This scheme is mainly for affected businesses that may require small loans but who are unable to provide the collateral required by the banks. It can guarantee up to 50 percent of the loan value or $20,000, whichever is lower. Businesses accessing the credit guarantee scheme may also be eligible to the interest subsidy scheme.
The Business Advisory Scheme will offer advisory services of value up to $1,000. Affected businesses will be able to choose their preferred business advisory from a list of approved advisors.
The Business Hardship Fund was designed for businesses that were not directly affected, yet have suffered hardship as a result of November 16. The maximum amount available to any one business is $3,000. It will not provide cash grants, but it will assist by meeting the legitimate expenses of the affected businesses. To be eligible for this scheme a business must prove that it had suffered or experienced hardship, and is unable to meet part or all of its liabilities.
NZAID and AusAID finance both scheme, $4 million for the Business Recovery Facility Assistance Scheme and TOP$150,000 for the Business Hardship Fund.