20 days to pay: Turnbull takes lead on small business payment reform
If you thought the wait for your pay cheque was bad, spare a thought for Australian small business owners who were found to have to wait an average 25 days past the due date to receive payments for services according to data from a recent Inquiry into Payment Times and Practices.
Thankfully the tide may be turning to give small businesses greater access to cash, with Prime Minister Malcolm Turnbull announcing on Wednesday that the federal government will be required to pay invoices up to $1 million within 20 calendar days - down from the government's current 30 day policy.
With over 6,500 small businesses currently working with the federal government, Mr Turnbull said the change would help put more money back in pockets.
"It demonstrates the government's continued commitment to small business, the engine room of employment in Australia,” he said.
"The government is already a proud leader in terms of payment times and practices, with the latest pay on-time survey showing Commonwealth agencies paid 97 per cent of their invoices within 30 days."
While the move will only apply to contractors with the federal government for now, Mr Turnbull also hoped big businesses would be encouraged to follow suit.
RELATED: Delays in financing is stunting growth for Aussie small businesses, GetCapital research finds
The government's shift in policy comes in response to calls for change from the Australian Small Business and Family Enterprise Ombudsman following its Inquiry into Payment Times and Practices released in April.
The Inquiry reported that Australia’s payment practices were falling well behind other nations, and that action needed to be taken in order to curtail the growing trend of late payments, which it found were limiting growth and raising costs for businesses.
Small Business and Family Enterprise Ombudsman Kate Carnell welcomed the announcement from the federal government, describing it as a ‘game changer’ for small business.
“Cash flow is king for small business and this will make a huge difference,” she said. “It will save money on interest payments, boost confidence and free up capital for reinvestment.”
Looking for a financing solution for your own small business? Check out Mozo’s business banking hub to compare a range of business credit card options, or check out some top business loans below:
Business Loans
Unsecured Business Loan
A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.
Interest Rate
Upfront Fee
Funding speed
from 9%-Within same dayUnsecured Business Loan
A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.
- Interest Rate
- from 9%
- Upfront Fee
- -
- Ongoing Fees
- 2.5% establishment fee of the disbursed amount.
- Late payment fee
- $50.00
- Transaction fee
- $0.00
- Early repayment penalty
- $0.00
- Other fees
- -
- Loan type
- Loan
- Security type
- Unsecured
- Minimum loan amount
- $10,000
- Maximum loan amount
- $750,000
- Minimum loan term
- 3 months
- Maximum loan term
- 5 years
- Repayment frequency
- Weekly
- Repayment types
- Principal & Interest
- Minimum trading period
- 6 months
- Minimum annual turnover
- $60,000
- Application speed
- within 24 hours
- Approval speed
- 2 hours
- Funding speed
- Within same day
- Extra repayments allowed
- yes
- Redraw allowed
- yes
- Other benefits
- Early payout options and early repayment discounts are available. Principal-only payout available after 6 months.
- Other restrictions
- Loans above $300,000 must be secured by property.
Prospa Plus Business Loan
Prospa uses risk-based pricing to determine your interest rate. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.
Interest Rate
Upfront Fee
Funding speed
Interest rates vary based on risk.3.5%from 24 hoursProspa Plus Business Loan
Prospa uses risk-based pricing to determine your interest rate. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.
- Interest Rate
- Interest rates vary based on risk.
- Upfront Fee
- 3.5%
- Ongoing Fees
- $0.00
- Late payment fee
- $0.00
- Transaction fee
- -
- Early repayment penalty
- $0.00
- Other fees
- -
- Loan type
- Loan
- Security type
- Secured
- Minimum loan amount
- $150,000
- Maximum loan amount
- $500,000
- Minimum loan term
- 3 months
- Maximum loan term
- 3 years
- Repayment frequency
- Weekly
- Repayment types
- Principal & Interest
- Minimum trading period
- 3 years
- Minimum annual turnover
- $1,000,000
- Application speed
- 10 Minutes
- Approval speed
- Same-day approval
- Funding speed
- from 24 hours
- Extra repayments allowed
- yes
- Redraw allowed
- no
- Other benefits
- -
- Other restrictions
- -
Unsecured Business Loan
Business Loans from $5,000 to $5,000,000 with high approval rates. Access to funds on loans up to $500,000 in as little as 3 hours. Cash flow friendly repayments and open minded offers.
Interest Rate
Upfront Fee
Funding speed
On Application3%, starting at $399from 3 hoursUnsecured Business Loan
Business Loans from $5,000 to $5,000,000 with high approval rates. Access to funds on loans up to $500,000 in as little as 3 hours. Cash flow friendly repayments and open minded offers.
- Interest Rate
- On Application
- Upfront Fee
- 3%, starting at $399
- Ongoing Fees
- no
- Late payment fee
- $50.00
- Transaction fee
- -
- Early repayment penalty
- no
- Other fees
- -
- Loan type
- Loan
- Security type
- Unsecured
- Minimum loan amount
- $5,000
- Maximum loan amount
- $5,000,000
- Minimum loan term
- 3 months
- Maximum loan term
- 1 year
- Repayment frequency
- Weekly, flexible
- Repayment types
- Principal & Interest
- Minimum trading period
- 4 months
- Minimum annual turnover
- $144,000
- Application speed
- 10 Minutes
- Approval speed
- within 1 hour
- Funding speed
- from 3 hours
- Extra repayments allowed
- yes
- Redraw allowed
- no
- Other benefits
- Daily repayments available.
- Other restrictions
- Fast Business Loans for amounts up to $500,000 are funded in 3 hours, Small Business Loans can take 24 hours.
Fixed Rate Unsecured Business Loan
Interest Rate
Upfront Fee
Funding speed
-On applicationVariesFixed Rate Unsecured Business Loan
- Interest Rate
- -
- Upfront Fee
- On application
- Ongoing Fees
- $0
- Late payment fee
- $0.00
- Transaction fee
- $10 ($50 for staff assisted withdrawals)
- Early repayment penalty
- not disclosed
- Other fees
- -
- Loan type
- Loan
- Security type
- Unsecured
- Minimum loan amount
- $5,000
- Maximum loan amount
- $250,000
- Minimum loan term
- -
- Maximum loan term
- -
- Repayment frequency
- -
- Repayment types
- Principal & Interest
- Minimum trading period
- Varies
- Minimum annual turnover
- Varies
- Application speed
- Varies
- Approval speed
- Varies
- Funding speed
- Varies
- Extra repayments allowed
- yes
- Redraw allowed
- yes
- Other benefits
- LVRs available of up to 100% residential property or 80% owner-occupied non-specialised commercial property for secured loans up to $3 million.
- Other restrictions
- Eligible Westpac customers only. Annual turnover less than $50m.
Read reviews and learn more about Westpac business loans
Business Overdraft
Interest Rate
Upfront Fee
Funding speed
10.47% p.a. variableNegotiableVariesBusiness Overdraft
- Interest Rate
- 10.47% p.a. variable
- Upfront Fee
- Negotiable
- Ongoing Fees
- Fees and charges apply
- Late payment fee
- $0.00
- Transaction fee
- not disclosed
- Early repayment penalty
- 0
- Other fees
- -
- Loan type
- Overdraft
- Security type
- not disclosed
- Minimum loan amount
- $20,000
- Maximum loan amount
- -
- Minimum loan term
- -
- Maximum loan term
- -
- Repayment frequency
- n/a
- Repayment types
- n/a
- Minimum trading period
- Varies
- Minimum annual turnover
- $75,000
- Application speed
- Varies
- Approval speed
- Varies
- Funding speed
- Varies
- Extra repayments allowed
- n/a
- Redraw allowed
- n/a
- Other benefits
- -
- Other restrictions
- Must link with a NAB business transaction account and is repayable on demand
Read reviews and learn more about NAB business loans
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