Leading figures in the SME lending space have spoken out about the vital role that commercial brokers can play in ensuring that their clients are kept safe as the Australian Tax Office (ATO) begins to enforce back tax debts.
The ATO is to resume reporting SMEs to credit agencies should they fall behind on their taxes, a practice that they had halted due to the ongoing stresses within the small business sector brought about by the pandemic.
Under current legislation, the ATO can refer a business to credit rating agencies if they have an outstanding debt in excess of $100,000 for more than 90 days. SMEs can avoid this by negotiating a payment plan with the tax authorities, and commercial brokers are being encouraged to help their clients through this process before their tax arrears get out of hand.
“OnDeck is a proven leader in transparent and responsible online lending to small businesses,” explained OnDeck CEO Cameron Poolman, who has pioneered products like Lightening Loans, which can approve SME finance in two hours or less, to help businesses to get ahead of their debts.
“We have achieved our reputation by pioneering data analytics and digital technology to make real-time lending decisions and deliver unsecured loans rapidly to small businesses.”
“At the same time, if you owe a large tax bill and are worried about repaying it, like any creditor, get on the front foot and call the ATO about setting up a payment plan.”
“Small businesses that owe activity statement amounts may be able to pay these debts off interest-free over 12 months, and lenders such as OnDeck will be happy to see that a small business has a payment plan in place as it indicates that your house is in order.”
ScotPac are one of the biggest lenders to SMEs in Australia, and one of their senior execs, Craig Michie, said that brokers had to ensure lines of commication existed to help their clients stave off the taxman.
“The worst thing a business can do is stop communicating with creditors as it makes creditors more anxious,” he said.
“Even if you can’t pay now but have a pipeline of work that will provide cashflow, share those details with creditors and link your payment to that future cashflow.”
“SMEs should do this all the time, but it is especially important in the current business environment.”
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