SME lender OnDeck urges brokers to discuss Stimulus Package with small business clients
- The Morrison Government’s Stimulus Package offers a range of support for SMEs including an instant asset write-off enlarged from $30,000 to $150,000
- Taking advantage of the instant asset write-off can see an incorporated small business save up to $41, 250 in income tax
- A number of state governments have announced separate packages to support SMEs
- Brokers need to send two messages to SME clients – 1) they are still open for business – even remotely, and 2) the SME stimulus initiatives apply immediately but are a temporary measure only, so business owners need to act fast.
Sydney 19 March 2020: Leading online SME lender OnDeck Australia says the Morrison Government’s Stimulus Plan offers valuable support for the nation’s small business community, and brokers need to be aware of what’s available to meet the needs of their SME clients.
In response to the impact of the Coronavirus (Covid-19), the Federal Government has announced a range of support measures for small to medium businesses (SMEs). These include:
- An uplift in the instant asset write-off from $30,000 to $150,000 effective immediately. The availability of the instant asset write-off has been expanded to include businesses with annual turnover below $500 million, up from $50 million previously. This measure applies until 30 June 2020.
- SMEs with turnover below $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance. This will extend to 30 June 2021.
- Over 700,000 SMEs will receive a payment between $2,000 and $25,000 to help pay wages or hire staff.
- Small businesses with apprentices will receive wage subsidies of up to $21,000.
The Stimulus Package also includes $1 billion to support sectors, regions and communities that have been heavily impacted by the economic fallout of the Coronavirus, including tourism, agriculture and education.
Of particular interest to brokers is the newly enlarged instant asset write-off. An incorporated small business taking advantage of the $150,000 instant asset write-down can save up to $41, 250 in tax for the current financial year – a significant plus for cashflow.
State governments have also chipped in with various initiatives. In NSW, the $2.3 billion stimulus package includes payroll tax waivers and various fee waivers for bars, cafes, restaurants and tradies[i]. In Qld, measures include deferring monthly payroll tax lodgements and payments until 31 July 2020. The Tasmanian State Government is providing targeted support to small businesses in hospitality, tourism, seafood production, and export sectors.[ii].
Mr Cameron Poolman, CEO of OnDeck Australia, says, “The health of the small business sector is critical to the well-being of the Australian economy. Nine out of ten business operating in Australia are small business, and two out of five workers are employed by a small business. So we welcome the Stimulus Package initiatives that are designed to support the SME community through the current market volatility.
“Plenty of small businesses are likely to take advantage of the initiatives, especially the expanded instant asset write-off, but it is important for brokers to have conversations with their SME clients around these measures.”
Mr Poolman cautions, “Small business owners need to be aware that the stimulus measures are temporary. In particular, the enlarged instant asset write-off only applies until 30 June 2020, giving SMEs just three months to take advantage of this tax break.
“The instant asset write-off is only available on new or secondhand assets that are installed by 30 June 2020[1], so time is of the essence. It is critical for SME owners to act fast to secure finance to purchase the asset and have it in situ before 30 June to be eligible for the instant write-off.
“In addition, brokers need to remind all their clients that they are still very much open for business despite the social distancing currently being recommended as a precaution against Covid-19. Brokers can ‘meet’ electronically with clients via Skype, Google Hang-outs, email or even phone.”
“As OnDeck is an online-only lender, we do not require face to face meetings with brokers or their clients. Our business model also allows loan approval times of as little as one working day, so we are well-placed to deliver funds to SMEs aiming to take advantage of the $150,000 instant asset write-off,” said Mr Poolman.
In response to Covid-19, the entire team at OnDeck Australia is working remotely. This measure is designed to support the health and wellbeing of our employees and the broader community.
“We have the systems and technology in place to ensure there won’t be any drop in our high levels of efficiency or impact to the high level of customer service provided to our SME customers and brokers,” Mr Poolman concluded.
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 $13 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
About the research
AltFi research was conducted online in April 2019 by Honeycomb Strategy across 430 SME owners Australia-wide. The survey included SMEs with less than 50 employees, annual turnover of $50,000-$5 million, and in operation for at least 12 months.
Media Contacts:
Anthony O’Brien
Corpwrite Australia
+61 (0) 411 578 818
[1] https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/
[i] https://www.nsw.gov.au/news-and-events/news/health-boost-and-economic-stimulus/
[ii] http://www.premier.tas.gov.au/documents/FACT_SHEETS_-_STIMULUS_PACKAGES_Final-V2.0.pdf
