It’s a busy time of year for small businesses and SMEs, as tax time looms. Fear not – the end is in sight, and we’re here to support you through the next few months.
Whether you’re looking to make the most of the Government’s SME Recovery Loan Scheme before it ends (you’d better get in quick), want to find out more about how the instant asset write-off works, or would like to explore your asset finance borrowing options, we’re here to help.
Whatever your business goals, let us help you take your business to the next level – speak to us today.
Interest rate news
At its June meeting, the RBA raised the official cash rate by 50 basis points to 0.85 per cent. The move followed last month’s decision to increase the cash rate for the first time since November 2010.
Last month, Reserve Bank governor Philip Lowe said the Board was committed to doing what was necessary to ensure that inflation in Australia returned to target over time. “This will require a further lift in interest rates over the period ahead,” he said. Lowe indicated it was not unreasonable for the cash rate to climb to 2.5 per cent.
What this means for small business owners and SMEs is that finance for things like company cars, business assets and plant and equipment could become more expensive. For those with existing debts, you may already be feeling the impact.
Despite interest rates going up, there is still a lot of competition amongst lenders to secure business. If you’re looking to buy an asset or equipment for your small business or SME, speak to us about your finance options and we’ll find you a competitive offer.
SME Recovery Loan Scheme ending soon
If your business was impacted by COVID-19, it’s worth looking into the Government’s SME Recovery Loan Scheme, which ends on June 30, 2022.
Small and medium-sized businesses with a turnover of less than $250 million that have been adversely affected economically by COVID-19 may be able to access loans of up to $5 million over a term of 10 years. Under the extended scheme, the government is offering a loan guarantee of 50 per cent.
You can find out more about eligibility requirements and how it works here. Alternatively, speak to us.
Making the most of the instant asset write-off
With tax time approaching, don’t forget to speak to your accountant about whether you’re eligible for the instant asset write-off scheme. The Government has extended the scheme until June 30, 2023.
The scheme allows eligible businesses to potentially claim an immediate tax deduction for qualifying assets up to $150,000.
Assets must cost less than the instant asset write-off threshold and be purchased and used in the year that the write-off is claimed.
You can find more information about eligibility criteria here and how it works on the ATO website.
Growing demand for equipment and machinery financing
In other news, recent data from the Commonwealth Bank of Australia showed small and medium businesses were investing heavily in equipment and machinery in response to supply constraints.
The data showed equipment and machinery financing was significantly up in the first six months of FY22, compared to the same period in FY21 and FY20.
South Australia had the highest demand for equipment financing in the six months to December 2021, with lending increasing 198 per cent in the state. Small business owners in Victoria followed (lending was up 181 per cent), while in Western Australia it was up 84 per cent and New South Wales saw an increase of 53 per cent.
Need to chat?
We understand how difficult it can be for business owners to manage cashflow, while at the same time securing the assets and equipment they need. Rest assured we’re here to help.
Whether you need a new office equipment, machinery or vehicles for your business, we’ll compare the market and get you the funds you need.
Remember, interest rates on equipment and asset finance can vary greatly, so it pays to shop around and seek professional advice about what’s right for you. Get in touch today.