Inland Revenue says time is running for some people who haven’t repaid money from Covid-era Small Business Cashflow (SBC) loans.

The loans were introduced in May 2020 and by the middle of that month more than 33,000 businesses had applied with 31,000 loans approved.

Today, Inland Revenue said most loans were taken out in the first few months of the scheme and people had five years to repay the loan.

“Many will reach their cut-off point from June this year.”

About 10,000 loans were already in default, owing just over $161 million, the tax department said.

The SBC scheme was intended to help small and medium-sized businesses affected by the Covid-19 pandemic.

From June, Inland Revenue will default a loan if it was not paid off, and default interest would be charged.

“More than 129,000 businesses were issued loans totalling$2.4 billion. The average amount approved was $17,000.”

Many borrowers were sole traders, or small businesses with fewer than six fulltime staff.

“The highest number of loans were taken out by businesses in Auckland where there were longer lockdown periods.”

In March 2022, a top-up loan was introduced for existing SBC borrowers.

That top-up loan was $10,000, plus any amount the borrowers were eligible for but had not taken in their first loan.

As of December 31 last year, more than 50,000 people had repaid their loan in full, with a total loan balance of $953 million still owing.

Inland Revenue’s website said for people who default: “You need to repay your entire loan immediately if you default and we demand full payment.”

It said customers behind on payments would be notified and reminded of repayment obligations.

In extreme cases, such as if somebody fraudulently applied for money, prosecutions would be considered.