Government support


Federal response

In March, the US Federal Government passed a US$2 trillion rescue package to assuage the economic impact of COVID-19. Named the Coronavirus Aid, Relief and Economic Security (CARES) Act, it was the largest economic stimulus measure in modern history.

The deal included US$1,200 payments to most American adults, US$367 billion in loans for small business, US$130 billion for hospitals, and a US$500 billion loan programme for corporations, states, and local governments.

On 4 July, President Trump signed into public law a measure which provides a five-week extension of the Paycheck Protection Program (PPP), allowing registered small businesses to apply for a slice of the roughly US$130 billion in PPP funding that remains available through previous appropriations legislation.

This action followed the President's signing of the Paycheck Protection Program Flexibility Act (H. R. 7010), which significantly modifies provisions related to the forgiveness of loans made to small businesses under the PPP. The Flexibility Act establishes a minimum maturity of five years for a paycheck protection loan with a remaining balance after forgiveness. It also extends the covered period during which a loan recipient may use such funds for certain expenses while remaining eligible for forgiveness. In addition, it raises the non-payroll portion of a forgivable covered loan amount from the current 25% up to 40%. Read more about the updates here.

For further guidance, the US Chamber of Commerce (the world's largest business organisation, representing more than 3 million businesses across the US) provides excellent summaries, articles and resources around cash flow, e-commerce, and strategy for the US market. Check out their coronavirus resource page here.

The CARES Act and New Zealand businesses

The CARES Act opens up a vast amount of funds for US businesses to tap into. These programmes will be administered by the US Federal Government's Small Business Administration (SBA), which is tasked with the collection of information, documentation, authentication, approval and release of funds to businesses seeking financial support.

SBA loans have historically had a lengthy approval process, due to bureaucratic requirements for application. Advice to NZTE is that many of these barriers have been eradicated or relaxed, and the special CARES Act loan programmes will be streamlined with a simple online application form. Additionally, the programmes will not require collateral or personal guarantees (depending upon amounts borrowed).

Note that the 'small business' definition used by the SBA captures almost all US businesses except for large enterprises and publicly traded companies. The new CARES Act programmes are geared to cover the bulk of businesses when it comes to employing US workers, many of which are medium or large businesses by New Zealand standards.

Two CARES Act programmes delivered by the SBA are of specific interest to New Zealand companies operating in the US:

  • Economic Injury Disaster Loan Program (EIDL). Coronavirus has been declared a disaster in the USA. As part of its disaster assistance programme, the SBA is providing low-interest working capital loans of up to US$2 million to small businesses and non-profits affected by the coronavirus.

You can check your EIDL eligibility and begin the application process online here. Make sure you have your business details on hand for this application and for later steps in the process.

  • Paycheck Protection Program (PPP). The PPP offers small businesses access to short-term cash flow assistance aimed to help deal with the immediate global impact caused by the COVID-19 pandemic. These loans are made by SBA-approved lenders (banks), certified by the SBA, and guaranteed by the US Federal Government.

Entities can apply for both of these programmes. The key difference is that the PPP needs to be facilitated in conjunction with an SBA-approved lender or bank, meaning documentation is more extensive and the process will likely take longer.

Many US companies (including those owned by NZ businesses) will already be customers of banks that are SBA-approved lenders. These banks are already working and focusing on this area, and could be a good starting point. Here are a few examples, among many more:

For more information on the SBA and CARES Act, see this presentation for guidance (PDF).

Other government responses

Federal Contracting Provisions Sec. 1108: Contracting

(i) Requires Federal agencies to extend contract performance time by no less than 30 days to small businesses affected by COVID-19 until September 2021, unless the contract is considered to be mission critical by the agency.

(ii) Requires the Federal government to continue to pay small business contractors and revise delivery schedules, holding small contractors harmless for being unable to perform a contract due to COVID-19 caused interruptions until September 2021.

(iii) Requires Federal agencies to promptly pay small business prime contractors and requires prime contractors to promptly pay small business subcontractors within 15 days, notwithstanding any other provision of law or regulation.

(iv) Requires any Federal agency seeking to cancel a small business prime contract, due to the vendor failing to meet on the terms of their contract either directly or indirectly due to the novel coronavirus, to first consult with the agency's Director of the Office of Small and Disadvantaged Business Utilization (OSDBU).

There is a tremendous amount of content circulating on the above initiatives. For further guidance, the US Chamber of Commerce (the world's largest business organisation, representing more than 3 million businesses across the US) provides excellent summaries, articles and resources around cash flow, e-commerce, and strategy for the US market. Check out their coronavirus resource page here.

State-level business relief and support

Relief and support of business in the different states can take many forms. The initial form of relief is typically associated with the payment and processing of taxes (sales, use, payroll, property, etc.) and usually occurs at the state level.

Below are links to some key state and city-level COVID-19 business relief information.

State of California:

Follow this link to access each state governor's websites. This site also offers a guide to the small business support that is currently offered at state level.

Useful links


Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.