An SME lender has welcomed the government’s stimulus plan which offers aid to the country’s small businesses, and is encouraging brokers to educate themselves on what has been made available to meet the needs of their clients.
Cameron Poolman, CEO of OnDeck Australia explained, “Plenty of small businesses are likely to take advantage of the initiatives, especially the expanded instant asset write-off, but it is important for brokers to have conversations with their SME clients around these measures.”
The government’s support includes:
- An uplift in the instant asset write-off from $30,000 to $150,000, effective immediately; further, instant asset write-offs have been expanded to include businesses with annual turnover below $500m, up from $50m previously – until 30 June 2020
- SMEs with turnover below $500m will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance – until 30 June 2021
- A payment between $2,000 and $25,000 to help pay wages or hire staff for over 700,000 SMEs
- Wage subsidies of up to $21,000 for small businesses with apprentices
“Small business owners need to be aware that the stimulus measures are temporary. In particular, the enlarged instant asset write-off only applies until 30 June 2020, giving SMEs just three months to take advantage of this tax break,” said Poolman.
“It is critical for SME owners to act fast to secure finance to purchase the asset and have it in situ before 30 June to be eligible for the instant write-off.”
State governments have announced various initiatives of their own. In New South Wales, the $2.3bn stimulus package includes payroll tax waivers and various fee waivers for bars, cafes, restaurants and tradies. In Queensland, measures include deferring monthly payroll tax lodgements and payments until 31 July 2020. The Tasmanian State Government is providing targeted support to small businesses in hospitality, tourism, seafood production, and export sectors.
“Brokers need to remind all their clients that they are still very much open for business despite the social distancing currently being recommended as a precaution against Covid-19,” Poolman added.
“Brokers can ‘meet’ electronically with clients via Skype, Google Hang-outs, email or even phone.”
“As OnDeck is an online-only lender, we do not require face to face meetings with brokers or their clients. Our business model also allows loan approval times of as little as one working day, so we are well-placed to deliver funds to SMEs aiming to take advantage of the $150,000 instant asset write-off.”