SME owners concerned about the coronavirus outbreak impacting their cash flow are being urged to talk to their creditors as soon as possible.

Earlier this month the RBA cut the official cash rate by 25 basis points to a new record low of 0.50% due to the impact of the coronavirus outbreak on global financial markets.

And as the economic ripple effects of the coronavirus start to hit Australian businesses, financial and consumer law firm MyCRA Lawyers says the repercussions of not meeting loan repayments in a timely fashion could impact businesses for five years.

“The risk of an extended and prolonged economic downturn is real and affecting the entire economy,” says MyCRA Lawyer’s CEO Graham Doessel.

“The problem is even though the tourists and customers may have stopped, the bills won’t stop and that can mean defaults on people’s credit files.”

Mr Doessel says as soon as you are 14 days or more late in making a loan repayment it can go on your comprehensive credit file for two years.

“This will impact your ability to access credit,” Mr Doessel says.

“[If you] get a default or a court judgement on your file you will be feeling the financial symptoms of coronavirus for five years.”

What to do if your business is affected

Mr Doessel says if your business is struggling to meet its bills you should contact your creditors straight away and apply for hardship.

“Most lenders have a positive obligation to offer hardship in genuine cases. If you have seen your cash flow decimated due to coronavirus, reach out to your creditors and ask for some breathing room,” Mr Doessel says.

“Whatever you do, do not stick your head in the sand, because you can’t hide from your financial obligations.”

Mr Doessel adds that lenders and companies like Telstra, Optus, AGL and Origin Energy have hardship policies for genuine victims of circumstances beyond their control.

“Anyone who finds themselves financially affected by the virus should make a list of their bills and contact each credit provider – in writing if possible – to let them know the circumstances and to check no bills have gone unpaid,” he said.

“Most companies have the discretion to forgive a debt in extreme cases.”

Businesses impacted by the bushfires

The coronavirus outbreak comes as many Australian businesses are still reeling from bushfires.

Indeed, a NAB survey has found that two-thirds of Australian SMEs have been directly or indirectly impacted by the recent bushfires, with business disruption, higher insurance, and lower customer confidence cited as key factors.

“We know that many families and businesses face an uncertain future and we recognise the significant impact the fires have had on cash flow, loss of customers and supplier disruption,” says NAB Chief Customer Officer of Business and Private Banking Anthony Healy.

We’re here to help

There’s no doubt many Australian businesses are doing it tough right now – whether that’s because of the coronavirus outbreak or the summer bushfires.

If yours is one of them, please get in touch. We’re ready to assist you in any way we can and will work through your available options with you.

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 Reserve Bank of Australia (RBA) has cut the official cash rate by 25 basis points to a new record low of 0.50% as the coronavirus outbreak impacts global financial markets.

RBA Governor Philip Lowe said the coronavirus has clouded the near-term outlook for the global economy and global growth in the first half of 2020 will be lower than earlier expected.

“Prior to the outbreak, there were signs that the slowdown in the global economy that started in 2018 was coming to an end,” Governor Lowe said in a statement.

“It is too early to tell how persistent the effects of the coronavirus will be and at what point the global economy will return to an improving path.”

The RBA previously cut the official cash rate to 0.75% in October, which was the third interest rate cut in 2019.

More rate cuts on the way?

Governor Lowe also hinted that more rate cuts could be on the way in coming months, saying the RBA will continue to monitor developments closely and assess the implications of the coronavirus for the economy.

“The Board is prepared to ease monetary policy further to support the Australian economy,” Governor Lowe said.

Prime Minister Scott Morrison earlier in the day said he expected the big banks to “do the right thing” by Australians and pass on any rate cut in full.

“And honestly, I don’t see it any different to what Qantas did when we called out to Qantas and we said, we need your help to get some people out of China,” the Prime Minister said.

Want to know what this rate cut means for your home loan?

With this being the fourth RBA cash rate cut since June 2019, it can get a bit confusing as to just how much of these cuts your lender is passing on to you.

The good news is we’re following the market closely and can tell you which lenders pass this fourth rate cut on to their customers in full, and which lenders don’t.

So if you’d like to find out, then please get in touch – we’d be happy to help break it down for you.

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.

Employers who have underpaid their staff superannuation have been granted a one-off amnesty to make things right, but that doesn’t mean they’re completely ‘off the hook’.

The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019, which just passed federal parliament, encourages employers to come forward and pay any unpaid superannuation in full.

Small Business Ombudsman Kate Carnell says while most small businesses do the right thing in this area, with 95% already complying, the amnesty will give them a further six months to ensure they’re compliant.

“This is a one-off amnesty that gives small business an opportunity to get up to date with outstanding payments to current and past employees, without being slugged with the harsh penalties that usually apply,” explains Ms Carnell.

‘Not off the hook’

The federal government says the amnesty doesn’t mean employers are off the hook.

Employers must still pay all that is owing to their employees, at a high penalty rate of interest. However, the amnesty will not hit employers with the large lump-sum penalties usually associated with late payment.

Those lump sum penalties generally include a minimum 100% penalty on top of the super guarantee shortfall owed, and up to 200% for the most serious cases.

“We estimate … 7,000 employers will come forward in the next six months before the amnesty ends,” says Assistant Minister for Superannuation Jane Hume.

A clean slate

The Institute of Public Accountants (IPA) chief executive officer Andrew Conway says the one-off amnesty allows employers to clean the slate.

“We acknowledge that small businesses can sometimes experience cash flow issues, making them vulnerable when it comes to meeting their super guarantee obligations by the required due date. This amnesty gives them time to atone,” says Mr Conway.

Need a hand?

If you think your business might have made a mistake and underpaid staff super, but you’re worried about the cash flow issues raised by Mr Conway, get in touch.

We can help you apply for business finance that’ll help support both your employees’ future and your business’s cash flow.

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.

It takes most first home buyers longer than a full working week to house hunt and apply for finance for their ‘dream’ property, according to new research.

The 2020 St George Home Buying Survey found that it takes first-home buyers an average of 44 hours to research properties, hone in on one they like, and begin the home-buying process – including applying for a mortgage.

Why does it take that long?

Eight in ten people surveyed said they found the application process for a home loan time consuming and inconvenient.

What are they finding difficult about it? Well, more than half said they were ‘pained’ by the overall amount of information they need to process.

The other main hurdles facing home buyers included:

– Understanding what was involved (73% of people surveyed)
– Learning about the housing market (71%)
– Working out their financials (64%).

How we can help cut down that time

We go through this on a daily basis so we can help make the process a whole lot less time consuming, confusing and inconvenient for you.

We can help you understand what’s involved and help you work out your financial hurdles.

Don’t forget government assistance

On a related note, it’s worth noting that the federal government’s First Home Loan Deposit Scheme, which started on January 1, still has most of its 5,000 non-major lender scheme places available.

The scheme can allow first home buyers to purchase a property with a deposit of 5% without having to pay Lenders Mortgage Insurance (LMI).

To find out more, get in touch. We’re more than happy to run you through the scheme and how it may help you crack into the property market sooner.

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.

Downsizers are tipped to take advantage of ‘the perfect storm’ and get the most out of the property market this year, predicts the national body representing professional buyers’ agents.

With softer lending conditions and strong property prices tipped for 2020, cashed-up downsizers looking to sell the family home and move into apartments or regional areas are in the box seat, says Real Estate Buyers Agents Association (REBAA) president Cate Bakos.

“With the potential for further low interests, softer lending conditions and low stock levels, it could be ‘the perfect storm’ for downsizers this year,” says Ms Bakos.

“The sorts of challenges that most buyers face – including valuations and gaining finance approval – is obviously not a concern for a buyer who is not impacted by a shortfall.”

A ‘formidable force’

Ms Bakos adds that low loan-to-value ratios, or even cash purchases, will eradicate any concerns about valuation dilemmas and make downsizers a formidable opposition at any auction.

“There is no doubt that wealthy older buyers – downsizers, baby boomers, empty nesters, retirees – will be a powerful force in the property market in 2020 and one that won’t be going away soon,” she says.

Downsizing doesn’t necessarily mean smaller

Interested in the idea of downsizing? You’re not alone.

In fact, more than half of Australians over the age of 55 are open to downsizing, according to another recent report by the Australian Housing and Urban Research Institute (AHURI).

According to the report downsizers are mobile, with nearly half moving to new neighbourhoods; the main reasons for downsizing were lifestyle, financial considerations and reduced maintenance.

“While downsizing may include a reduction in dwelling size, to older Australians it points to a housing aspiration where the internal and outdoor spaces are manageable, and represents a financial benefit,” explains lead report author Dr Amity James.

In fact, most downsizers move into a dwelling with three or more bedrooms, the report shows.

“Most downsizers still want space and regard spare bedrooms as necessary in a dwelling,” Dr James adds.

Get in touch

If you’re interested in downsizing to improve your lifestyle and reduce home maintenance then feel free to get in touch.

We’d be more than happy to chat with you about all things finance for that new home you’ve got your eye on.

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.