Small to medium business enterprises (SMEs) have long been recognised as the powerhouses of our economy; 97 per cent of all New Zealand businesses have 20 employees or less – and those 480,000 SMEs provide employment for roughly a third of all Kiwis and represent about 29 per cent of our GDP.
They are also some of the hardest hit by the Covid-19 crisis lockdown New Zealand is currently experiencing.
That has stimulated Suncorp New Zealand, the company behind Vero and Asteron Life, to come up with a suite of options to lend a helping hand to SMEs facing financial hardship because of the virus.
Mark Wilkshire, Suncorp New Zealand's Executive General Manager, Customer Experience, says the options – covering a range of measures to lighten businesses' financial obligations while maintaining vital insurance cover – are available to all customers but says SMEs will be among those most in need.
That includes extending credit terms to brokers - enabling customers to defer payments for longer and would also include other steps to help reduce outgoings at a time of such financial vulnerability.
One example he points to is the parked-up cover option available to Vero customers who may now have vehicles that are no longer being used.
"We're also reminding customers that we're still on the end of the phone if they need to make a claim and will do our best to assess the claim remotely where possible. They can even make a claim if their drivers' licences or WOFs have expired during lockdown, although naturally they'll need to renew these as soon as practical after the level four restrictions end."
"Every situation is different so has to be taken on a case-by-case basis but there are a lot of things we can do to help our customers through this difficult period." For Vero business customers that includes a range of possible options:
- Premium reductions for commercial vehicles no longer in use<br/>
- Full cover continuation for unoccupied business premises<br/>
- Increased cover for working from home situations<br/>
- Temporary removal of the normal exclusion for unattended construction sites <br/>
Suncorp has also extended its credit terms to brokers for up to 120 days and is encouraging customers to speak to their brokers about premium payment flexibility.
Suncorp's moves follow the government's introduction of its Business Finance Guarantee Scheme, a $6.25 billion package designed to make available government-guaranteed loans of up to $500,000 over three year to get them through the Covid-19 crisis.
To be eligible, businesses must be New Zealand-based and have had turnovers of between $250,000 and $80 million at the end of the 2019 financial year. The loans can only be used to meet urgent liquidity or bridging financing needs due to Covid-19 disruption.
The banks will still want to be responsible lenders and will still have to ensure the borrowers can meet their commitments or they will simply be exposing many small and medium enterprises to even more financial pressure.
"That's why we are looking at things like Covid-19 specific affordability options and are taking a pragmatic approach to the insurance challenges businesses face while working from home and leaving their premises unoccupied," Wilkshire says.
"We know that the country as a whole has been very supportive of the measures the government is taking to help the country get through Covid-19 and we want to add to that.
"That's particularly so when you realise that about 70 per cent of SMEs have only one employee – and that person will be in lockdown at home unless they are an essential service, though most SMEs won't be."
Wilkshire says businesses in sectors most likely to face elongated challenges are those in the tourism, hospitality, accommodation and travel or related industries – all areas where many SMEs operate. Regions like Queenstown, Rotorua, Taupo and Tauranga may also be among those affected more than others over a longer period.
"In making this call, we have all our customers in mind but we know SMEs make up a big proportion of those who will need help."
For more information: https://www.vero.co.nz/coronavirus.html