4 important upcoming business deadlines

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Interested in a $10,000 business grant? How about buying a much-needed asset and immediately writing off the cost? Here are four looming deadlines your business may need to start moving on ASAP.

We understand that navigating the challenges of COVID-19 is probably taking up your every waking hour at present (and possibly the non-waking hours, too).

But there are several fast-approaching deadlines for accessing COVID-19 support that you may want to start turning your attention towards if you haven’t already.

Fortunately, few things make a person move faster than a looming deadline – so you’ve got that on your side (and us!).

$10,000 COVID-19 small business grants

Small businesses struggling as a result of the COVID-19 pandemic can apply for much needed help through the Small Business Relief Fund, managed by the Council of Small Business Organisations Australia in partnership with Salesforce.

But here’s the catch: applications are only open for a week and close at 5pm (AEST) on Monday June 1. You can apply here.

There are 67 grants of $10,000 each designed to assist businesses that are recovering from the effects of the pandemic.

Most states are also offering $10,000 support grants and assistant packages you can apply for with a June 1 deadline, including NSW, Victoria, WA and SA.

$150,000 instant asset write-off

Time’s ticking for your business to make use of the $150,000 instant asset write-off before the end-of-financial-year June 30 deadline.

A few months back, just as coronavirus was ramping up in Australia, the federal government increased the instant asset write-off threshold from $30,000 to a whopping $150,000 as part of its economic stimulus package.

Under the scheme, businesses can immediately write off the cost of assets such as vehicles, tools, equipment and – thanks to the recent threshold increase – heavy vehicles, tractors and machinery.

Better yet, the threshold applies on a per asset basis, so eligible businesses can immediately write off multiple assets.

This is something you’ll want to get moving on as soon as possible though, as the asset needs to be used, or installed and ready for use, before EOFY to be eligible.

If you’d like to find out more, feel free to get in touch or visit the scheme web page here.

Coronavirus SME loan guarantee scheme

SMEs in need of working capital due to the coronavirus outbreak can access unsecured loans through the government’s $40 billion Coronavirus SME Loan Guarantee Scheme.

Because the government will guarantee 50% of the value of each new loan, lenders can offer the loans “more cheaply and more freely” compared to ordinary business loans, says the Australian Banking Association.

Participating lenders are already accepting applications from SMEs, so if you’re looking to bridge a gap in your business’s cash flow, please give us a call.

We’re more than happy to discuss your eligibility, more features of the scheme, and how you can apply before the 30 September 2020 deadline.

2018-19 tax return

Due to the coronavirus pandemic, the ATO has extended the lodgement date for 2018-19 income tax returns lodged through a tax agent to June 30, 2020. The extension applies to individuals, companies, partnerships and trusts.

But while it might feel you have a full month left to lodge your return, remember that there will be a bottleneck when it gets to crunch time, and your accountant has a lot on their plate at the moment.

So, as with the deadlines above, it’s imperative to get the ball rolling on this now to avoid the $850 late lodgement penalty.

Get in touch

If there’s any way we can help you beat any of the above deadlines – in particular, the instant asset write-off scheme and loan guarantee scheme – then please don’t hesitate to get in touch. We’re here to help you and your business any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Making the most of the instant asset write-off before the EOFY deadline

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Two months and counting (down). That’s how long your business has to make use of the $150,000 instant asset write off before the end-of-financial-year June 30 deadline.

Early last month, just as coronavirus was ramping up in Australia, the federal government increased the instant asset write-off threshold from $30,000 to a whopping $150,000 as part of its economic stimulus package.

Under the scheme, businesses can immediately write off the cost of assets such as vehicles, tools, equipment and – thanks to the recent threshold increase – heavy vehicles, tractors and machinery.

Better yet, the threshold applies on a per asset basis, so eligible businesses can immediately write off multiple assets.

Is your business eligible?

Not only was the threshold increased, but the scheme can now be accessed by businesses with an annual turnover of up to $500 million (up from $50 million).

Assets that could be immediately written off include a concrete tank for a builder, a tractor for a farming business, or a truck for a delivery business.

But it’s not enough to simply purchase the asset to be eligible. The new or second-hand asset must also be first used, or be installed and ready for use, this financial year.

Now, it’s important to keep in mind that “write-off” doesn’t mean “free asset”.

Basically, this initiative allows you to immediately claim all the tax deductions you would have claimed over the life of the asset.

This can help with your business’s cash flow, as getting the cash back sooner means you can re-inject it straight back into other parts of your business.

Bruce’s tractor: a case study

Say ‘gday’ to Bruce, who runs Fair Dinkum Farms in the Darling Downs and has an aggregated annual turnover of $25 million for the 2019‑20 income year.

In May, Bruce finally splashes out and purchases the second-hand tractor he’s had his eye on for a while now for $140,000, exclusive of GST, for use in his business.

Under the new $150,000 instant asset write‑off, Fair Dinkum Farms can claim an immediate deduction of $140,000 for the purchase of the tractor in the 2019‑20 income year.

This is $136,101 more than he could have immediately claimed under normal arrangements, as Bruce would have only been able to claim $3,899 using the diminishing value method over a 12 year period.

At the company tax rate of 27.5%, old mate Bruce will pay $37,427.78 less tax in 2019‑20 than he would have if the instant asset write-off scheme wasn’t in place.

This will improve Fair Dinkum Farms’ cash flow and help Bruce’s business withstand the economic impact of the coronavirus.

Limits relating to cars

Now, there’s a limit relating to cars that we should note.

If you purchase a car for your business, the instant asset write-off is limited to $57,581 (the business portion of the car limit) for the 2019-20 income tax year.

You cannot claim the excess cost of the car under any other depreciation rules.

Also, say the vehicle will be used 80% of the time for business purposes and 20% for personal usage, you can only claim deductions for 80% of the asset.

Getting finance that’s right for your business

When purchasing an asset under this scheme, it’s crucial to select the correct finance product.

And that’s where we can help out. We can present you with financing options for the instant asset write-off scheme that are well suited to your business’s needs now, and into the future.

So if you’d like help obtaining finance that’s gentle on your cash flow, and helps you achieve your long-term goals, please get in touch this month well ahead of the deadline – we’d love to help out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

What is the Coronavirus SME Loan Guarantee Scheme?

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SME businesses in need of working capital due to the coronavirus outbreak can now access unsecured loans “more cheaply and more freely” than ordinary business loans.

The initiative is part of the government’s $40 billion Coronavirus SME Loan Guarantee Scheme, which kicked off just before the Easter weekend.

Because the government will guarantee 50% of the new loans, lenders can offer the loans “more cheaply and more freely” compared to ordinary business loans, says the Australian Banking Association.

The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Furthermore, no payments are required from the business on these loans for the first six months (however interest will capitalise during the repayment holiday).

Eligibility requirements

The government will provide eligible lenders with a guarantee for loans with the following terms:

– eligible SMEs, including sole traders, must have a turnover of less than $50 million

– maximum loans of $250,000 per borrower

– loans will be up to three years, with an initial six month repayment holiday

– unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

The decision on whether to extend credit, and management of the loan, will remain with the lender.

Want to apply?

Participating lenders are already accepting applications from SMEs. So if you’re looking to bridge a gap in your business’s cash flow, please give us a call.

We’re more than happy to discuss your eligibility and more features of the scheme.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The coronavirus economic stimulus plan for SMEs explained

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Small businesses all around the world are facing uncertain times. However, rather than shutting up shop until COVID-19 passes, the federal government is hoping to stimulate SME spending through a raft of initiatives and tax incentives.

Indeed, the government estimates its two new business investment initiatives have the capacity to support more than 99% of businesses across Australia (3.5 million SMEs).

Basically, it’s hoping these measures will encourage SME owners to “stick with investments they had planned, and encourage them to bring investment forward to support economic growth over the short term”.

Let’s take a look at what they involve.

Instant asset write-off threshold increase

The instant asset write-off threshold has been increased from $30,000 to $150,000 (ex GST) and can now be accessed by businesses with an annual turnover of up to $500 million (up from $50 million) until June 30 2020.

Assets that may be able to be immediately written off include a concrete tank for a builder, a tractor for a farming business, or a truck for a delivery business, for example.

Now, it’s important to keep in mind that “write-off” doesn’t mean “free asset”.

Basically, this initiative allows you to immediately claim all the tax deductions you would have claimed over the life of the asset.

This can help with your business’s cash flow, as getting this cash back sooner means you can re-inject it straight back into other parts of your business.

Accelerated depreciation deduction

The other big initiative in the federal government’s plan to support SMEs is accelerated depreciation.

Basically, businesses will be able to immediately deduct 50% of the asset cost in the year of purchase and then also depreciate the remaining 50% over the asset’s useful life, so long as the business has a turnover of less than $500 million.

This initiative will provide businesses with a 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.

Sound a little confusing? The good news is that the Business.gov.au website has two great case studies that explain exactly how this initiative works in more detail.

Get in touch today

If you’d like to find out more about the instant asset write-off or the accelerated depreciation deduction, and how they might work with an asset purchase for your business, get in touch today. We’d love to help out any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Banks ‘too cautious’ on SME loans: financial regulators

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The country’s top financial regulators are concerned banks are ‘too cautious’ when it comes to loans for small business borrowers.

The Council of Financial Regulators (CFR) – which is chaired by RBA governor Philip Lowe and includes APRA, ASIC and federal Treasury – met to discuss the tight credit conditions for small businesses and the associated reduced risk appetite from many lenders.

As a result, ASIC will soon officially confirm that the responsible lending laws don’t apply to small businesses.

In their post-meeting quarterly statement, the CFR stressed that the flow of credit is fundamentally important to the functioning of the Australian economy.

“(We) discussed the concern that lenders’ risk appetite for some types of lending may have swung too far towards caution,” the CFR said.

The CFR’s statement is in response to repeated complaints from bankers this year that tighter small business lending has been an unintended consequence of the Hayne royal commission.

Great, so what are they actually doing about it?

During the meeting, CFR members discussed that in the coming weeks ASIC will release updated guidance on responsible lending provisions.

“It will confirm that responsible lending requirements do not apply to loans made predominantly for business purposes, regardless of the type of security offered for the loan,” said the CFR statement (and yes, they even bolded the ‘do not’ bit!).

The guidance will also assist lenders to better understand their obligations and reduce the risk of non-compliance.

Great, but what can I do about it?

That’s the easy bit – get in touch with us.

The lending appetite in the SME space is something we’re well across and are more than happy to bring you up to speed on.

So drop us a line and we’ll be happy to run you through some of your business’s financing options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.