Small business tax deduction scheme extended for six months
As small business owners begin picking themselves back up amid easing COVID-19 restrictions, the federal government has made a move to encourage them to invest in ‘big ticket’ items.
Treasurer Josh Frydenberg today announced the government will extend the deadline for instant asset write-offs by six months. About 3.5 million businesses are expected to benefit from the extension, which is forecasted to cost the budget $300 million.
The instant asset write-off is a scheme that allows businesses to claim immediate tax deductions on purchases including trucks, tractors and equipment. This write-off can be accessed multiple times for each item that falls under the threshold amount.
As part of its coronavirus support packages launched back in March, the government increased the write-off threshold to $150,000 and the size of businesses eligible to those with annual turnovers of below $500 million.
The expanded scheme was set to apply to assets used or installed by June 30, but that cut-off has now been extended to December 31.
It’s a final window of opportunity before the write-off reverts to a reduced $1,000 threshold for small businesses with turnovers of under $10 million. This change will now apply from January 1, 2021.
The extension comes after Australian Bureau of Statistics figures revealed Aussie businesses have pushed the brakes on investment. In the March quarter, investments in the major sectors of building and structure as well as equipment, plant and machinery shrank by 1.1% and 2.3% respectively.
How the extension will help small businesses
Frydenberg said the government’s latest move aims to drive up business investment and help enterprises kickstart their operations again as the economy awakens from its coronavirus-induced hibernation.
“When the restrictions are eased and people are back at work, our cafes and restaurants will be busy,” he said.
“Our hotels will have occupants again and our businesses will be able to export and import again, and they need the equipment and they need the machinery.
“We want businesses to get back to doing what they do best - growing, innovating and hiring people across the economy.”
The extended write-off means businesses can quickly recover cashflow tied up in any expensive asset purchases (of up to $150,000) that they make before the start of next year, whether it’s a coffee machine for their cafe or an industrial oven for their restaurant.
“[The extension is] designed to support businesses sticking with investment they had planned, and encourage them to bring investment forward to support economic growth over the near term,” Frydenberg said in a statement with small business minister Michaelia Cash.
Tips to boost your cashflow
Besides taking advantage of the instant tax write-off, there are a few other ways to free up capital for your business:
- Cut back on spending: Chances are fixed expenses like cleaning or photocopier support may no longer be necessary during COVID-19, so it’s a good time to review your costs to see which ones you can stop, delay or negotiate down for the time being.
- Expand your payment range: The secret to staying afloat as a business is to help your customers stay afloat. Instead of sticking to ‘cash only’, this may mean offering them other ways to pay, whether that’s credit cards or digital wallets.
- Embrace creativity: From dance studios moving their classes online to cafes delivering coffees to people’s front doors, businesses have used innovation to tackle the challenges brought on by coronavirus shutdowns. Now, with restrictions lifting, making up for lost income may be a matter of taking a step back once again and re-evaluating how you can transition back into ‘business as usual’.
- Consider a business loan: This is an easy way to get your hands on extra finance - especially if you apply for an unsecured business loan of up to $250,000 with a lender participating in the government’s SME Loan Guarantee Scheme. Under this scheme, the government will guarantee you half of your loan. Just bear in mind different types of loans will suit different business needs. While a line of credit (drawdown) is good for companies with uneven cashflow, a term loan (lump sum) makes more sense if you already know how much you need upfront.
For more information, check out our article on how to boost business cashflow during COVID-19, or scroll down below to compare your business loan options today.
Compare unsecured business loans - rates updated daily
Business+ Unsecured Loan
A simple way to fund your business’s big plans. Borrow up to $50,000 without using your assets as security. A fixed interest rate means your repayments don’t change over the life of the loan. Apply in minutes with the Business app. Enjoy a fast approval process. $495 establishment fee.
Interest Rate
Upfront Fee
Funding Speed
Rates range from 11.95% p.a. to 22.95% p.a.$495VariesBusiness+ Unsecured Loan
A simple way to fund your business’s big plans. Borrow up to $50,000 without using your assets as security. A fixed interest rate means your repayments don’t change over the life of the loan. Apply in minutes with the Business app. Enjoy a fast approval process. $495 establishment fee.
- Loan type
- Loan
- Security type
- Unsecured
- Minimum loan amount
- $20,000
- Maximum loan amount
- $50,000
- Minimum loan term
- 1 year
- Maximum loan term
- 3 years
- Minimum trading
- 1 year
- Minimum annual turnover
- $75,000
- Application speed
- Varies
- Approval speed
- Varies
- Funding speed
- Varies
- Upfront fee
- $495
- Ongoing fee
- $20 per month
- Late payment fee
- $0.00
- Transaction fee
- -
- Early repayment penalty
- Early Payout Costs apply during fixed rate period.
- Other fees
- -
- Early repayments allowed
- yes
- Repayment frequency
- Fortnightly, Monthly
- Repayment types
- Principal & Interest
- Redraw allowed
- no
- Other benefits
- -
- Other restrictions
- -
Read our Mozo Review to learn more about the Business+ Unsecured Loan
Unsecured Business Loan
Business Loans from $5,000 to $2,000,000 with high approval rates. Access to funds 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 $2,000,000 with high approval rates. Access to funds in as little as 3 hours. Cash flow friendly repayments and open minded offers.
- Loan type
- Loan
- Security type
- Unsecured
- Minimum loan amount
- $5,000
- Maximum loan amount
- $4,000,000
- Minimum loan term
- 3 months
- Maximum loan term
- 1 year
- Minimum trading
- 6 months
- Minimum annual turnover
- $120,000
- Application speed
- 10 Minutes
- Approval speed
- within 1 hour
- Funding speed
- from 3 hours
- Upfront fee
- 3%, starting at $399
- Ongoing fee
- no
- Late payment fee
- $50.00
- Transaction fee
- -
- Early repayment penalty
- no
- Other fees
- -
- Early repayments allowed
- yes
- Repayment frequency
- Weekly, flexible
- Repayment types
- Principal & Interest
- Redraw allowed
- no
- Other benefits
- Daily repayments available.
- Other restrictions
- -
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.
- Loan type
- Loan
- Security type
- Unsecured
- Minimum loan amount
- $5,000
- Maximum loan amount
- $300,000
- Minimum loan term
- 3 months
- Maximum loan term
- 4 years
- Minimum trading
- 6 months
- Minimum annual turnover
- $60,000
- Application speed
- within 24 hours
- Approval speed
- 2 hours
- Funding speed
- Within same day
- Upfront fee
- -
- Ongoing fee
- 2.5% establishment fee of the disbursed amount.
- Late payment fee
- $50.00
- Transaction fee
- $0.00
- Early repayment penalty
- $0.00
- Other fees
- -
- Early repayments allowed
- yes
- Repayment frequency
- Weekly
- Repayment types
- Principal & Interest
- 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.
- 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
- Minimum trading
- 3 years
- Minimum annual turnover
- $1,000,000
- Application speed
- 10 Minutes
- Approval speed
- Same-day approval
- Funding speed
- from 24 hours
- Upfront fee
- 3.5%
- Ongoing fee
- $0.00
- Late payment fee
- $0.00
- Transaction fee
- -
- Early repayment penalty
- $0.00
- Other fees
- -
- Early repayments allowed
- yes
- Repayment frequency
- Weekly
- Repayment types
- Principal & Interest
- Redraw allowed
- no
- Other benefits
- -
- Other restrictions
- -
Invoice Finance
Increase cashflow by unlocking the power of your receivables with Octet’s Invoice Finance solution. Receive up to 85% of your debtor’s ledger with tailored facilities ranging from $100K to $12M.
Interest Rate
Upfront Fee
Funding Speed
0% for the first 60 days, then rates starting from 9% p.a.On ApplicationInstant on approvalInvoice Finance
Increase cashflow by unlocking the power of your receivables with Octet’s Invoice Finance solution. Receive up to 85% of your debtor’s ledger with tailored facilities ranging from $100K to $12M.
- Loan type
- Line of Credit
- Security type
- Secured
- Minimum loan amount
- $100,000
- Maximum loan amount
- $12,000,000
- Minimum loan term
- 1 months
- Maximum loan term
- -
- Minimum trading
- 1 year
- Minimum annual turnover
- $1,000,000
- Application speed
- 2 Minutes
- Approval speed
- 24 Hours
- Funding speed
- Instant on approval
- Upfront fee
- On Application
- Ongoing fee
- Ongoing service fees apply. Amount is calculated as a percentage of invoices processed.
- Late payment fee
- $0.00
- Transaction fee
- $0.00
- Early repayment penalty
- -
- Other fees
- -
- Early repayments allowed
- -
- Repayment frequency
- -
- Repayment types
- n/a
- Redraw allowed
- -
- Other benefits
- Complimentary Trade Finance facility available subject to approval. Access to the Octet Supply Chain Platform.
- Other restrictions
- Up to 85% value of unpaid invoices available.
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