4 important upcoming business deadlines

, ,

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.

Relief for SMEs: tardy paying companies given final notice

,

Promising news for SMEs this week: supply chain financing provider Greensill has given late-paying companies formal notice that it will ditch them if they continue to extend their payment terms beyond 30 days.

This is good news for SMEs because cash flow problems – which are often caused by, or exacerbated by, late payments – are one of the biggest reasons for small businesses failing.

So what exactly has happened?

Well, back in February, supply chain financing (SCF) provider Greensill informed all Australian clients that they must not push out payment terms to SME suppliers beyond 30 days.

The multi-billion-dollar company, founded by Bundaberg-born, London-based financier Lex Greensill, says virtually all of its clients in Australia have complied (keyword: “virtually”, but more on that soon).

“Greensill has allowed a period for the remaining clients to complete their internal reviews stemming from our request,” a Greensill statement says.

“We have given formal notice to those clients that their SCF facilities will be discontinued unless they ensure that they do not use our SCF facilities to push out payment terms to SME suppliers beyond 30 days.”

So, who’s still holding out?

Australian Small Business and Family Enterprise Ombudsman Kate Carnell has the answer on that one.

She says it’s clear Greensill’s statement is in relation to its dealings with contractor UGL, owned by construction firm CIMIC – Australia’s biggest construction company.

“UGL has reportedly extended its payment terms to its small business suppliers to 65 days from the end of [the] month the invoice is lodged, offering supply chain finance to those that want to be paid earlier and are willing to take a discount on the invoiced amount,” Ms Carnell explains.

“This is an example of clear misuse of supply chain finance as outlined in our recently released Supply Chain Financing Review. Practices such as this are harmful to small businesses, especially in the current challenging environment.”

The promising news is that according to the AFR, CIMIC has now put its controversial SCF scheme “under review”.

So what exactly is supply chain financing?

SCF, also known as supplier finance or reverse factoring, can free up cash flow for both the SME business that sends the invoice to be paid, and the company that owes the money.

It does this by the SCF provider acting as a facilitator between the two.

Here’s a quick example: let’s say Big Business Inc (buyer) orders some machine parts from Little Joe Traders (supplier).

Little Joe then sends the invoice to Big Business Inc, which approves the invoice and confirms that it will pay the SCF provider for the invoice at the invoice’s maturity.

Little Joe then has two options: 1) Patiently wait for the invoice’s payment terms to be met and paid in full; or 2) Get paid earlier by the SCF provider, but at a discounted rate.

Often Little Joe’s decision will depend on his cash flow requirements at the time.

So what’s the problem?

Normally nothing. When done right “it’s an excellent concept for both buyer and seller”, says Clive Isenberg, chief executive of Octet, which specialises in supply chain financing for smaller companies.

But the risk, as Mr Isenberg points out, is that if your business is supplying the big end of town, you can become overly reliant on them and have to play by their rules.

“You are being constantly pressurised to follow the way they’re going. You’ve got to agree to their payment terms,” he told the AFR.

Need a cash flow solution for your business?

As you’re well aware, business cash flow solutions aren’t exclusively for the big end of town.

There are plenty of products that cater to SMEs’ many different needs.

So if you’d like to explore some of the options available to your business, then please get in touch – we’re happy to run you through them.

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.

Further protections for businesses: loan deferral scheme extended

,

Here’s some promising news for big and small businesses alike: six-month loan deferrals are now available to larger businesses on the condition that they don’t terminate leases or evict tenants for falling behind on their rent due to COVID-19.

Two weeks back, the Australian Banking Association (ABA) announced that if your small business was being affected by the coronavirus, your loan repayments would be deferred for six months.

They’ve since extended this support to businesses with loans of up to $10 million (up from the $3 million), which is expected to directly benefit a further 30,000 businesses across the country.

Why the loan deferral extension helps businesses big and small

Now, on the face of it, it may seem like this loan deferral extension is good news for the bigger end of town.

But it comes attached with conditions that will help out small business owners across the country too, as it covers 90% of commercial property owners who have loans with an Australian bank.

“The type of businesses this applies to includes commercial landlords of properties such as local shopping centres, pubs, clubs and restaurants, who must agree not to terminate leases or evict current tenants for rent arrears due to COVID19 in order to access support,” says ABA CEO Anna Bligh.

The conditions

Basically, the conditions have been designed to encourage landlords to support their tenants.

“Where landlords within this threshold do the right thing by their tenants, banks will do the right thing by them,” explains Bligh.

The new measures will apply in all sectors of the economy, on an opt-in basis, under the conditions that:

– commercial property landlords must provide an undertaking to the bank that for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears as a result of COVID19

– the customer has advised that its business is affected by COVID-19

– the customer was current in terms of existing facilities 90 days prior to applying

– interest is capitalised, meaning either the term of the loan is extended or payments are increased after the deferral period.

Businesses with total loans of more than $10 million may also be eligible for relief, but this will be considered on a case by case basis.

Get in touch

It’s important to note that this isn’t the only assistance package that’s been made available to businesses since the coronavirus outbreak started impacting the Australian economy.

For example, the federal government’s instant asset write-off scheme’s threshold has increased from $30,000 to $150,000, and each lender has their own specific support packages available.

So if you’re a business owner – big or small – who would like to explore the options available to you then please get in touch. We’re here to help you 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.

SME owners impacted by coronavirus urged to contact creditors

, ,

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 race is on: thousands rush to apply for first home loan scheme

, ,

If you’re thinking of taking advantage of the new First Home Loan Deposit Scheme then you better act quick, as thousands of first home buyers have already applied for the 10,000 guarantees available.

Between January 1 and 10, more than 3,000 first home buyers applied for one of the 10,000 spots up for grabs this financial year.

It’s fair to assume that number will have risen since, as there are more than 100,000 first-home buyers in Australia yearly.

Under the new federal government scheme, first home buyers must find a home within 90 days of approval.

The Commonwealth Bank (CBA) and the National Australia Bank (NAB) have been allocated a total of 5,000 places this financial year.

Another 5,000 spots will be available with 25 smaller lenders from February 1.

After those spots have been filled, first home buyers will have to wait until the new financial year on July 1 when another 10,000 places will become available.

What exactly is the First Home Loan Deposit Scheme?

Ok, so usually first home buyers with a deposit of less than 20% pay Lenders Mortgage Insurance (LMI) when taking out a home loan.

But under the government scheme, first home buyers with only a 5% deposit could be eligible to purchase a property without having to pay for LMI – which could save them as much as $10,000.

Now, it’s important to note this is not a handout – it’s a government guarantee to help first home buyers break into the property market with a smaller deposit.

In order to be eligible first home buyers can’t have earned more than $125,000 in the previous financial year, or $200,000 for couples (and both need to be first home buyers).

More details on eligibility can be found on the scheme’s website here. You can also check out the property price caps here.

Want to find out more?

If you’re thinking about purchasing your first home soon and are considering applying for this scheme – give us a call today.

We’d love to run you through the scheme in more detail and, if you’re eligible, help you apply for it through one of the scheme’s participating lenders.

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.