Brokers have been presented with a big opportunity in the SME lending market following an announcement by the Australian Tax Office.
The ATO recently announced that it will start random audits of a sample of hundreds of small to medium enterprises and individual taxpayers. According to non-bank lender, Bluestone Mortgages, this means brokers will be well placed to help small businesses with lending solutions to pay their outstanding taxes and consolidate any other debts.
The chief executive of Bluestone Mortgages, Peter Wood, says a small business’ income can be a lot “lumpier” causing them to fall behind come tax time.
“A typical example is [an SME] may be currently under arrangement with the ATO to make payments if they have missed a lump sum payment before. This can be due to a number of reasons, but one of the most common reasons is their income can be a lot lumpier – money owed from their debtors may turn up late and as a result of that, they may have had to make an arrangement with the ATO because their debtors are not paying them on time,” he told Australian Broker
“It is not around any [tax] avoidance at all. It is just around whether there is an opportunity to structure their finances and take out some of that debt because they will get charged by the ATO under that type of arrangement – which the going rate is about 8-9%.”
Wood says brokers should embrace this as another touch point for their SME clients.
“I think the opportunity for brokers is there is another touch point for their SME clients. Obviously they will touch base with their clients a number of times per year but this is another opportunity for them to touch base with their clients and reinforce whether there is any opportunity there around refinancing tax debt,” Wood told Australian Broker