In the wake of the COVID-19 economic impact, Governments and banks have been working to provide support for businesses. Expectations for the business climate in Australia are grim for the foreseeable future – focus is on survival. Below are three instances of how the stimulus package and the banks will offer relief to affected businesses during this stressful time.
RBA Rate Cut to 0.25%
The RBA’s rate cut to 0.25% has stimulated business loan rate cuts, providing savings for businesses looking to refinance for a better rate to help ease repayments.
6 months repayment freeze
A number of banks have started to offer small businesses 6 months repayment freeze. For a loan of $400,000, the freeze means an extra $11,000 available for the business to spend over the six-month period.
Instant asset write-off extension and Depreciation Deductions
The Morrison Government has pledged a substantial extension to the instant write-off for small and medium businesses, with the aim of increasing investment. Currently, this write-off is available to organisations with a turnover of up to $50 million, for purchases of up to $30,000. This is to be extended to include businesses with turnovers of up to $500 million and purchases of up to $150,000.
Extensions will apply until June 30th. The instant asset write-off extension is expected to cost $700 million. The Government asserts it is an economic investment for the future.
In conjunction with the write-off extension, depreciation deductions will also be accelerated, through a limited fifteen-month investment incentive. Until June 30th, 2021, businesses with a turnover of less than $500 million will be eligible to deduct a further 50% off any asset in the year it was purchased.
If you need assistance exploring your business’s entitlements under the banks’ and Government’s relief measures, get in touch with your Morrows Advisor.