30,000 reasons for SMEs to act fast
1 in 4 SME owners intend on taking out finance before EOFY but businesses need to act fast to take advantage of the $30,000 instant asset write-down in the current financial year.
- The Morrison Government has increased the instant asset write-off threshold to $30,000 and expanded eligibility to businesses with a turnover of less than $50 million.
- 84% of SME owners have heard of the instant asset write-off
- SMEs relying on a bank loan to fund an eligible asset purchase could be disappointed. One in four SMEs have been rejected for bank finance.
- Most SME owners would use the write-off to invest in a new vehicle, IT equipment or tools and machinery
Sydney June 3rd 2019: Leading SME lender OnDeck Australia is urging small and medium-sized enterprises (SMEs) to act fast to secure finance ahead of 30 June 2019 to take advantage of the $30,000 instant asset write-off in the current financial year.
As part of the 2019/20 Federal Budget, the instant asset write-off was given an uptick to $30,000 effective 7:30pm AEDT on 2 April 2019, and expanded to include businesses with a turnover of less than $50 million, up from $10 million previously.
Federal Government figures confirm that over 350,000 businesses have taken advantage of the instant asset write‑off. A far greater number – 3.4 million SMEs, stand to benefit from the new rules [1].
Independent research by SME lender OnDeck Australia confirms that over eight of ten (84%) small businesses owners are aware of the instant asset write-off. However, two out of five were concerned that the write-off would end with a change in government.
Mr Cameron Poolman, CEO of OnDeck Australia, said, “A more certain political environment together with the enlargement and expansion of the instant asset write-off, means SMEs can now invest in their business with certainty, while benefiting from tax savings to aid cash flow.”
Finance the key to making asset purchases
SMEs often need finance to purchase eligible assets, and this can be an uncertain and time-consuming process when businesses rely on bank funding.”
OnDeck found one in four SMEs have been knocked back for bank finance in the past. Among those that have successfully acquired funding, 29% say their business was negatively impacted by the time taken to secure finance.
As an online-only lender, OnDeck fast-tracks the loan application and approval process, allowing key documents such as bank statements to be uploaded online. Loan funding can take a matter of days rather than weeks.
“With 30 June just around the corner, time really is of the essence. I urge SMEs to act fast to take advantage of the write-down. It’s not just about tax savings. It’s an opportunity to strengthen your business through increased productivity and efficiency,” said Mr Poolman.
OnDeck, which expanded its SME lending in 2018 to include plant and equipment finance, found most SME owners would use the instant asset write-off to invest in a new vehicle, IT equipment or tools and machinery.
About the $30,000 instant asset write-off [2]:
- The threshold has increased to $30,000 and been extended to 30 June 2020.
- The instant asset write-off now also includes businesses with a turnover less than $50 million.
- Eligible SMEs can claim a deduction of up to $30,000 for the business portion of each asset (new or second hand), purchased and installed ready for use from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020.
- The entire cost of the asset must be less than the instant asset write-off threshold, irrespective of any trade-in amount.
- The write-off can be claimed for multiple asset purchases.
About OnDeck
OnDeck (NYSE: ONDK) is the proven leader in transparent and responsible online lending to small business. Founded in 2006, the company pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online. Today, OnDeck offers a wide range of term loans and lines of credit customized for the needs of small business owners. OnDeck has provided over $10 billion in loans to customers in 700 different industries across the United States, Canada and Australia. In Australia, OnDeck is backed by leading accounting software provider MYOB and has a 5-star rating from Trust Pilot. For more information, visit www.ondeck.com.au
Media Contact:
Anthony O’Brien
Corpwrite Australia
+61 (0) 411 578 818
anthony@corpwrite.com.au
[1] https://www.budget.gov.au/2019-20/content/tax.htm#backing
[2] https://www.ato.gov.au/Tax-professionals/Newsroom/Your-practice/Instant-asset-write-off-increased-and-extended/
