Government Stimulus Package for Small Business

Government Stimulus Package For SME Businesses

Good Morning

For our latest newsletter we have highlighted some of the Government relief in relation to small and medium size businesses (SME) during the COVID-19 period. We have found in our talks with some clients that the information can be overwhelming for those working, running and maintaining a business and now trying to comprehend what can be accessed from the stimulus package.

Please find below some incentives that you, your friends or family may be eligible for. We have attached a link below to the Government site and as always please feel free to contact us to discuss further.

Jobkeeper Payment 

  • $1,500 per fortnight per eligible employee:

- Must have been employed at 1 March; Sole traders eligible if they had an ABN by 12 March.
- Superannuation is not required to be made on payment. 

  • Qualifying period begins 30 March and will run for 6 months.

  • Eligible businesses with turnover below $1 billion must be able to demonstrate a reduction in “GST turnover” of 30% compared to a prior year period of at least a month:

- New businesses that have been trading for less than a year may be able to provide the commissioner with other evidence to qualify. Please check with your accountant or the link attached below.
 

Investment Incentive

Increasing the instant asset write off threshold and other measures associated with small to Medium Businesses (SME):

  • Eligibility has been expanded to businesses with an aggregated turnover of less than $500 million (up from $50 million).

  • From 12 March to 30 June 2020, assets purchased below $150,000 (ex-GST) now eligible for immediate write off (up from $30,000).

  • Other accelerated depreciation measures:

- Small businesses with aggregated turnover less than $10 million and who use the simplified depreciation rules can deduct 57.5% of qualifying assets over the write-off threshold up front between 12 March 2020 and 30 June 2021.

Cash Flow Boost for Small Businesses

The Government will provide up to $100,000 (tax free) to small and medium businesses and not-for-profits (including charities) that employ people, with a minimum boost of $20,000.
Employers will receive a payment equal to 100% of salary and wages withheld with a maximum of $50,000 and a minimum of $10,000 this financial year with the same in the first quarter of 2020/21.

Eligibility
Businesses with aggregated annual turnover under $50 million are eligible. Eligibility will generally be based on prior year turnover.
 

Guaranteeing the Flow of Credit for Small Business

Government guarantees support to SME lenders. This is more on a higher level for lenders but shows the support that the Government is offering to non-bank lenders to provide a flow on support for SME clients.
 

Under the Coronavirus SME Guarantee scheme, the Government is providing a guarantee to SME lenders to support new short-term unsecured loans to SMEs with a turnover of up to $50 million.

  • Loans will be for a maximum of $250,000, for a period of up to three year (with an initial six-month repayment holiday) and will be unsecured.

  • The scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

  • Government is cutting red tape by providing a temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers.

  • Several major banks have already opted into the scheme

As mentioned this is a brief overview of some of the benefits that may be applicable for you, or tour family or friends that have a small business and are finding things difficult at this time. If you have a mortgage, the deferment of loan repayments as well as Government subsidies are there to help businesses survive and get through this time.

Please feel free to contact us if you would like further information, contact your accountant or click the link attached for further information.

https://www.asbfeo.gov.au/my-business-health/categories/covid-19?gclid=CjwKCAjw7e_0BRB7EiwAlH-goAlUC81IMwBC1d5WUZU52JoPbY80ua6QHxJezt9BQkQq-CVqrqO3uRoCKaoQAvD_BwE

Take care and we look forward to speaking with you soon.

Regards

Justin Moise
The Loan Group Team

Justin Moise