Need help? Here’s how government is supporting business through COVID-19
The government has announced a range of support services for businesses impacted by the COVID-19 epidemic. However many small business owners are struggling to understand what help they can get. Here’s the lowdown.
The government is offering temporary cashflow support to small businesses by offering employers a payment equal to 100 per cent of the tax withheld on salary and wages (this has gone up from 50 per cent previously announced), with the maximum amount payable being $50k the minimum $2k.
Not-for-profit organisations will also be eligible.
The cash flow boost provides a tax-free payment to employers. The ATO will automatically calculate it. Employers will be eligible for a second payment for the July to September quarter.
Learn more about Boosting cash flow for employers.
Help paying your apprentice or trainee’s wages
If you employ an apprentice or a trainee the government has agreed to pay eligible employers a subsidy of 50 per cent of the apprentice’s wage. This will be backdated to January 2020 and will continue til September 30 2020.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Read more about the assistance to help pay for the wages of your apprentices or trainees.
Casual staff who have been forced to ease work due to impacts of the coronavirus crisis will be eligible to apply for income support. The government is fast tracking applications for the Jobseeker benefit and waiving the wait time to become eligible for payments.
Information on income support is available on the Services Australia website.
The SME Guarantee
As part of the most recent stimulus package, the government announced the introduction of the SME Guarantee scheme, whereby the government will go guarantor on new loans in an effort to support businesses through the crisis.
Under the Scheme, the Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans. These loans need to be used for working capital. The treasurer believes this will allow small businesses greater access to additional funding to help support them through the upcoming months.
SMEs with a turnover of up to $50 million will be eligible to receive these loans.
The Government will provide eligible lenders with a guarantee for loans with the following terms:
- Maximum total size of loans of $250,000 per borrower.
- The loans will be up to three years, with an initial six month repayment holiday.
- The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
As part of the loan products available, the Government says it will encourage lenders to provide facilities to small businesses that only have to be drawn is needed. This will mean that the SME will only incur interest on the amount they draw down.
If they do not draw down any funds from the facility, no interest will be charged, but they will retain the flexibility to draw down in the future should they need to.
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
Faster access to credit
if you are an existing business banking customer the good news is the Government has also relaxed the agreements around responsible lending, providing exemptions to lenders providing credit to existing small business customers. This exemption is for 6 months, and applies to any credit for business purposes, including:
- new credit
- credit limit increases
- credit variations and restructures
if you’re having difficulties meeting your tax or super payments due to COVID-19, the Australian Tax Office (ATO) says they are here to help. The ATO is providing relief for some tax obligations for businesses.
There is no blanket rule, rather the ATO will assess on a case by case basis Contact the ATO’s Emergency Support Infoline for businesses on 1800 806 218 for more information.
Instant Asset Write Off
The government has increased the instant asset write-off (IAWO) threshold from $30,000 to $150,000 and expanding access to include businesses with an annual turnover of less than $500 million (previously this was$50 million). This allows businesses to purchase new or second-hand assets between now and June 30 and receive an instant asset write-off in their tax return.