Help, my small business has been hit hard! | Colby Business Services

Help, my small business has been hit hard!

older male with small business

Written by Jenneth Orantia

Jenneth has more than 20 years of experience in media and communications. She provides guidance to small businesses looking to acquire new customers using owned, earned, paid and social channels. She is currently completing a Masters of Marketing degree.

26 March 2020

COVID-19 has hit the small business community hard. With Australia now in stage two of the coronavirus shutdown, a broad range of businesses have been banned or restricted from operating, placing enormous pressure on small business owners.

To help ease the devastating economic impact of the COVID-19 closures, the Federal Government has announced a variety of fiscal measures to help with cashflow and continue to meet fixed costs such as rent, utilities, and employee wages.

 

100% cashback on PAYG withholding – up to $100,000 payment for eligible SMEs and not-for-profits

Eligible employers who withhold tax to the ATO on their employee’s salary and wages will receive a tax-free payment equal to 100 percent of the amount withheld.  Employers are eligible if they are a small or medium-sized business with an aggregated annual turnover of under $50 million and employ workers. Even employers who are not required to withhold tax will still receive a minimum payment of $10,000.

This payment will be delivered as an automatic credit from 28 April 2020 when employers lodge their upcoming activity statements. If this entitles the entity to a tax refund, the ATO will deliver that refund within 14 days.

 

Additionally, a second payment will be introduced in the July-October period that will equal the first payment. This means eligible entities will receive at least $20,000 and a maximum of $100,000 for both payments.

These payments will be automatically calculated by the ATO, so employers will not need to fill out any forms to access it. See the government’s fact sheet on ‘cash flow assistance for business’ for more information.

 

Coronavirus SME guarantee scheme – available for SMEs with a turnover of up to $50 million

 The government will provide a guarantee of 50 percent to SME lenders with a turnover of up to $50 million for new unsecured loans to be used for working capital. The idea being that this will make lenders more likely to approve your loan application.

Better yet, SMEs will have a six-month repayment holiday on the loan, and since it is unsecured, borrowers will not have to provide any assets as security.

This scheme will commence by early April 2020, and will be available for new loans with participating lenders until 30 September 2020. For more information, see the government fact sheet here. The government is also providing a six-month exemption for responsible lending obligations for lenders who provide credit to existing small business customers.

For more information, see the government’s fact sheet on ‘Supporting the flow of credit’.

 

Tax payment deferrals

The ATO has announced a number of measures to provide relief for certain tax obligations for employers affected by the coronavirus outbreak. Eligibility for these measures will be assessed on a case-by-case basis.

These measures include low-interest payment plans for paying off existing and ongoing tax liabilities, deferral of payments and instalments that are due, changing GST reporting and payment to monthly (to get quicker access to GST refunds), and remitting interest and penalties.

For more information, see the ATO fact sheet here.

 

New JobKeeper payment

The most recent fiscal measure announced by the Federal Government is the new JobKeeper payment. Read more about this measure here.

These are difficult times. If you need help navigating the various financial relief options for your business, contact me today for a confidential consultation.

You may also like…

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *