Funding to save small businesses wanted from Govt

7:46 pm on 7 September 2010

The Government will be asked to provide special funding to help save small businesses facing ruin after the earthquake.

The Canterbury Chamber of Commerce is calling for a Government subsidy for the wages of employees until owners can get their businesses running again.

Chief executive Peter Townsend says Christchurch is driven by small businesses and, if too many collapse because they cannot trade, it will have a huge impact on the local economy.

He says one way of protecting firms would be a Government subsidy to keep people in employment.

Mr Townsend says many small companies in Christchurch are now just starting to realise how the earthquake has affected them.

He says they are worried about cash flow, keeping their employees and getting access to damaged buildings.

Talk to banks and IRD - English

Finance Minister Bill English says banks and Inland Revenue are the first point of contact for companies struggling in the wake of the Canterbury earthquake.

Mr English says some employers will be in a sound enough position to keep paying their employees, but others will have to talk to their bank about covering wages.

He said some will have to make "pretty quick" decisions so their employees have certainty about whether they still have a job.

Some businesses would be able to be up and running fairly quickly, but others would take longer.

Mr English expects there to be considerable demand for all sorts of skills in the coming months, and says the prospects for anyone who loses their job now are pretty good.

Most banks are offering three-month holidays on loan repayments to affected firms and waiving fees on restructuring loans and some transactions.