Bulk of SMEs preparing for growth over next 12 months: research

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Small businesses around the nation are once again confident about their future and ready to start driving toward their next phase of growth, according to new research.

The research, carried out by small business lender Prospa, found that 81% of Aussie SMEs expect their businesses to grow over the next 12 months.

This is despite 87% of business owners anticipating challenges within the same timeframe.

“Small business owners have not had an easy ride navigating through the pandemic, supply chain issues, staff shortages, and now increasing operating costs,” says Beau Bertoli, co-founder and chief revenue officer at Prospa.

“Despite ongoing challenges, the majority of small business owners have been working hard to make smart decisions to drive new revenue and become more efficient to propel growth.”

Business owners are also looking to access funding

The research found that 7 out of 10 business owners have either made, or are in the process of making, changes to their business.

This is combined with 71% of business owners expressing that they plan to embark on accessing funds in the short-term, ahead of possible further interest rate rises.

“Small businesses are not only confident, but studies show business owners are planning to apply for funds sooner to spare them from paying extra on their repayments,” adds Mr Bertoli.

Heads-up! The end-of-financial-year is fast approaching

Another key reason why small business owners are looking to access funds over the next few weeks is to take advantage of the federal government’s temporary full expensing scheme this financial year.

The scheme allows businesses keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.

This can help with your cash flow, as it allows you to reinvest funds back into your business sooner.

Trucks, coffee machines, tools, excavators, and vehicles are just some examples of assets eligible under the scheme.⁣⁣

But here’s the catch: the asset must be installed and ready to use by June 30 in order to be eligible for this financial year.

So if you’d like help obtaining finance to make the most of temporary full expensing ahead of the impending EOFY deadline, get in touch with us today.

We can help you with financing options that are well suited to your business’s needs now, and into the future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.

EOFY alert! Financial year-end is fast approaching

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Small business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the cost have just over a month to act this financial year.

There’s nothing like an impending deadline to get you moving.

And with June 30 now just over a month away (didn’t that sneak up on us!), time is running out for your business to take advantage of the federal government’s temporary full expensing scheme this financial year.

What is temporary full expensing?

Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.

It allows businesses that are keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.

This helps with your cash flow as it allows you to reinvest funds back into your business sooner.

Trucks, coffee machines, excavators, and vehicles are just some examples of assets eligible under the scheme.⁣⁣

There is just one small catch though …

The asset must be installed and ready to use by June 30 in order to be eligible for this financial year.

But rest assured that even if you do order the asset, and then miss the June 30 deadline because it doesn’t arrive in time, you can still write it off next financial year because the scheme is set to run until 30 June 2023.

Asset eligibility

To be eligible for temporary full expensing, the depreciating asset you purchase for your business must be:

– new or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);

– first held by you at or after 7.30pm AEDT on 6 October 2020;

– first used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023; and

– used principally in Australia.

Obtaining finance that’s right for your business

Being able to immediately write off assets is one thing, but if you don’t have access to the right kind of finance to purchase them now, the scheme won’t be much use to you this financial year.

So if you’d like help obtaining finance to make the most of temporary full expensing ahead of the impending EOFY deadline, get in touch with us today.

We can help you with financing options that are well suited to your business’s needs now, and into the future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.

SMEs invest in machinery, IT and energy-efficient assets for growth

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Australian small businesses are investing in their recovery through a surge in machinery purchases, IT and office technologies, and sustainable business assets, according to Commonwealth Bank (CBA) data.

The CBA research shows small business financing for equipment and machinery is up 17% so far this financial year compared to last year.

The research also shows 67% of businesses have budgeted for new equipment in the next 12 months, with 55% of those businesses specifically planning to invest in IT and office technology.

“As organisations welcome employees back into offices, they are investing in new technology to attract and retain staff, and many are demanding sustainable business investments,” explains Grant Cairns, CBA’s Executive General Manager for Business Lending.

Businesses going green

Across the small business sector, the biggest investment boosts have been in electric cars (156%), trailers (312%), and forklifts (395%).

According to CBA’s data, an increasing number of small businesses are taking advantage of discounts on financing for energy-efficient vehicles, equipment and projects.

“We’ve seen an uptake in hybrid and electric vehicles, as well as investments across other assets including IT equipment,” he adds.

“More small businesses are also seeing the benefits – including the financial benefit – of replacing old equipment with energy-efficient alternatives.”

What else is stimulating the growth?

Mr Cairns says the growing rate of investment is underpinned by a range of government incentives.

That includes attractive interest rates for the SME Recovery Loan Scheme; the extension of the federal government’s temporary full expensing scheme (aka instant asset write off) to mid-2023, and tax incentives announced in the federal budget that encourage small businesses to invest in technology and training.

Those tax incentives allow small businesses to receive a $120 tax deduction for every $100 they spend on training staff or investing in technology, up to a maximum of $100,000 a year.

“Government incentives have played a significant role in lifting business investment over the past few years,” says Mr Cairns.

“Since July last year, we’ve seen continued growth in asset finance in the small business sector, with the instant asset write-off scheme providing a good reason for customers to upgrade equipment and technology.”

Get in touch now ahead of the new financial year

To make the most of the government incentives outlined above, it’s important to get the ball rolling now.

For example, the government-backed SME Recovery Loan Scheme is only available until 30 June this year.

And to make the most of temporary full expensing (aka the instant asset write-off) this financial year, the asset you purchase must be installed or ready for use by 30 June.

So if you’d like to explore your finance options for purchasing an asset for your business, as well as any government schemes or energy-efficiency discounts your business might be eligible for, get in touch today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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 the!? Tesla came third on the new vehicles sold list?

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Car enthusiasts around the nation got a bit of a shock this week when the Tesla Model 3 rocketed up the sales leaderboard to place third for all new vehicles sold in March. How did that happen?

You might have seen an article by us a few weeks back about the sales of electric vehicles (EVs) almost tripling in the past year – from 6,900 in 2020 to 20,665 in 2021.

Great growth for sure, but when you consider that 101,233 vehicles were sold across the country in March alone, you wouldn’t expect any one EV model to threaten the big players such as Toyota, Mazda or Mitsubishi anytime soon.

Well, we got quite a shock when we looked at the Federal Chamber of Automotive Industries’ (FCAI) March sales figures leaderboard and saw that the Tesla Model 3 had rocketed up to third place.

Apparently more had sold than the Mazda CX-5 (fifth place), the Mitsubishi Triton (fourth), and were outsold only by the Toyota HiLux (first) and Toyota RAV4 (second).

But all is not what it appears

Turns out that Tesla’s third placing is accompanied by an asterisk.

FCAI chief executive Tony Weber explains that this is the first month that EV brands Tesla and Polestar have been included in monthly sales figure reports.

And as such, “when interpreting the data for March 2022, care should be taken as the Tesla data represents the company sales for the first three months of 2022”.

Still, that’s a fairly promising sign for EV enthusiasts out there – just three months of sales put them in a podium position with 4417 vehicles sold.

It wasn’t the only bit of promising news for EV fans this week, either.

Hyundai’s release of 109 electric SUVs – the Ioniq 5 – sold out in less than 7 minutes. In fact, 18,000 Australians registered their interest.

Meanwhile, Honda and General Motors have announced that they’ll be teaming up to build EVs that will sell for less than US$30,000 – potentially removing the all-important cost barrier.

Interested in buying an EV?

Did you know some lenders are offering lower rates on electric vehicles?

Macquarie, for example, recently sent out an email promoting comparison rates on electric cars to homeowners from 2.99% per annum (based on a loan of $30,000 and a term of five years).

That’s down from anywhere between 6.48% and 7.15% for a new internal combustion engine vehicle (depending on the loan-to-value ratio).

And as EVs become more popular in Australia, it’s a safe bet that we’ll see more and more lenders get their elbows out to offer competitive rates in this space.

So if you’re considering making the jump to an EV, get in touch and we can help you crunch the numbers on whether an electric vehicle loan is the right fit for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.

How much have car prices gone up since the pandemic began?

Most of you would have noticed that car prices have gone up significantly over the past two years. But how much have they gone up exactly? Let’s take a look.

You’re not imagining things – both new and used vehicle prices have spiked over the past two years (not to mention, house prices, petrol, groceries – everything, it seems, except wages).

Reasons for car price hikes include supply issues stemming from a semiconductor shortage, increases in cost for raw materials, complications around shipping and parts procurement, factory shutdowns and other pandemic-related issues.

But just how much have these disruptions sent car prices up? And what options are available if you need help financing your next purchase?

Let’s take a look.

New car price increases

The price of new cars has gone up as much as 25% since before the pandemic, according to an ABC article quoting website pricemycar.com.au.

A detailed analysis of 1100 models by goauto.com.au meanwhile calculates that as of March 2022, the average price of a new car is up 7.6% since pre-pandemic times.

However, it varies a lot from manufacturer to manufacturer, and even model to model.

For example, some models such as the Toyota Yaris have gone up by as much as 37% ($7290 extra).

Here’s how much some of the more prestigious manufacturing brands have increased prices:

Land Rover: 9.01%, Audi: 8.59%, BMW: 8.42%, Jaguar: 5.33%, Lexus: 3.36%.

And here’s how much some of the more mainstream manufacturers have increased prices:

Volkswagen: 9.83%, Hyundai: 9.06%, Jeep: 8.91%, Nissan: 8.59%, Toyota: 7.70%, Fiat: 7.21%, Mitsubishi: 6.80%, Renault: 6.60%, Subaru: 6.00%, Citroen: 5.93%, Mazda: 5.30%, Ford: 2.73%.

Used cars

It appears that because of the wait times for new cars (due to supply constraints), used car prices have gone up even more.

Used cars have risen 50%, Datium Insight’s price index in this ABC article shows.

Meanwhile, car valuation expert Redbook.com.au estimates a 25 to 35% increase in recent years.

How to finance your next purchase

Been wondering about how your neighbour bought that fancy new car?

Well, there’s a better than even chance they took out finance to purchase it, with Mozo research showing that 52% of car buyers took out a loan to buy a vehicle in the past decade, for an average loan size of $25,000.⁣⁣⁣

And when it comes to timeframes to pay that loan back, while most car loan providers offer a maximum term of up to 7 years, the average loan is usually repaid in the 2-3 year range.

It’s also worth mentioning that if you’re purchasing the vehicle for your business, the federal government’s temporary full expensing scheme can help your business’s cash flow ahead of the financial year deadline of June 30.

So if you’d like to find out more about financing your next vehicle purchase – whether it be for your household or business – get in touch with us today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.