Q'town bank's lockdown response - get rid of your staff
One of the really important roles in being local media is that people come to us with their stories. There's a lot of trust involved. The story we publish below is one of the most shocking we have come across. It is 100% written in the unedited words of a member of the Queenstown community - a long standing business owner who we have agreed not to name. We have spoken at length to the person concerned are are more than satisfied that this is a true account of how a Queenstown bank manager is promoting the sacking of staff - 12 people in total - who are currently being supported by the Government's wage subsidy.
"I have 3 viable businesses in Queenstown. We have lived here in Queenstown permanently for 14 years. We moved here from Auckland. The advice from the government is to talk to your banks and if your business is viable, the banks should help.
Our bank and the MBIE's directive to test the viability of a business are:
- Has your landlord given you rent free period? This gauges whether the landlord wants you to continue.
- Can you easily defer any external debts?
- Has you business suffered a 30% reduction? Is your cashflow impacted?
Based on above we are perfect candidates. Unlike some tenants, our landlords offered us 2 months rent free and are also willing to consider further relief if required.
We didn’t need to ask, they readily offered. Our financials looked good for 2019-20. Our forecasts prior to Covid was promising Besides a mortgage with our current bank, our only external debt is a car loan and Toyota agreed to defer payments. Bottomline as a business our external partners have supported us fully, as we have been good business people. The bank asked for my financials.
Our regular bank manager resigned just before Covid and we have a new manager. He said forecasts are redundant in this fast moving situation, so we are relying on parameters of rent relief, your financials & if you can manage to defer external debts. After we provided/proved all requirements. Our manager has now asked us for forecast. The forecast will undoubtedly be grim. Not just for us but for all in Queenstown and globally. I told him you said you didn’t need the forecast and anyway what can you determine from the forecast?
Anyway, I’m ok to provide forecast but what shocked me afterwards is the manager said, I need to see that you will cut down your staff, which is the biggest cost. I told him, I had wage subsidy for 12 weeks, so while job losses are inevitable, it’s premature to discuss this during lockdown. We will retain our staff for as long as we can. He implied that this will not work out and suggested the forecast should show you will cut down staff - that would look good we were told.
I said to the manager, I’m disappointed. At a time like this, even though numbers matter, I believe the bank has a responsibility to support business and to look at applications with compassion.
This is the government’s money not the bank’s. He agreed but said we need to support business that can downsize rapidly. My point is that although most QT businesses are viable businesses, I am pessimistic that we will receive support from the bank as they know tourism is out and the banks apparently believe that our businesses are not worth saving and so making it hard to get lending.
In the past 3 weeks, this manager has incessantly asked for financials, letters, documents or forecasts. I spoke to him yesterday and said, I’m spending time and money preparing these documents or paying our accountant to do this. So he sent me a link to prepare a forecast. I told him if I’m pessimistic about my forecast, you have no reason to give me funds. If I’m optimistic about business, you will think I’m being unrealistic and not give me the funds.
I’m stuck either way.
At the end of the day, the only support for SMEs is bank lending. There is no other subsidy for a business. We are grateful for the wage subsidy as this gives us satisfaction and dignity to our business at this time.
The bank lending has to be paid back. This money is needed now, not 6 months down the line. Most lendings will be against homes or businesses. As if this pressure is not enough. Queenstown will eventually bounce back and so will the world.
This will take time, but we need support now."