Current Support for Australian Businesses
26 Mar 2020Capital Equiptment Incentives
The recently released economic stimulus package increases the instant asset write-off threshold from $30K to $150K. The package expands the threshold to businesses with an annual turnover of less than $500mil, previously $50mil. The higher threshold will immediately deduct purchases of eligible assets costing less than $150,000. The write-off applies per asset, meaning businesses can immediately deduct multiple assets.
Do I qualify?
If your business is active, has a current ABN and an aggregated turnover of less than $500 million dollars per year, then you qualify for the tax write-off.
What’s Changed?
The previous threshold was only $30K for businesses with a turnover of less than $50mil. This new tax break increases the threshold to $150K for business with a turnover of less than $500mil – this new threshold applies until the 30th of June 2020.
What can you buy?
Advisors are commenting that smarter business owners will use the tax savings to invest in income producing assets – such as workshop machinery. By smart purchasing, further savings to business can be made (eg, reduced labour costs, faster production cycles etc)
What about used machinery?
The tax break applies to both new and used assets first used or installed ready for use before the 30th of June 2020.
For more information about the capital equipment incentive visit: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Support_for_business_investment.pdf
Coronavirus SME Guarantee Scheme
Under the Coronavirus SME Guarantee Scheme, the government will give support to Australian businesses by providing a guarantee of 50% to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. This guarantee will aid SME’s in gaining access to additional funding to help support them during the upcoming months.
Do I qualify?
If your SME is active, has a current ABN and an aggregated turnover of up to 50 million dollars per year, then you qualify to receive these loans.
What are the terms?
The maximum total size of loans cannot exceed $250,000 per borrower. The loans will be up to 3 years, with an initial 6-month repayment holiday. The loan will be a form of unsecured finance meaning the borrower will not have to supply an asset as security.
Timing
The scheme will launch in early April and be available to SME’s applying for new loans from participating lenders until 30th September 2020.
For more information about the coronavirus SME guarantee scheme visit: https://www.business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/coronavirus-sme-guarantee-scheme
Contact SCM Group today to see how we can improve your production and take advantage of the stimulus package.