A Business Survival Plan for COVID 19
Presenter Craig Banning Simon Prowse Hayley Kalms Hugo Furzer CEO Director of Navwealth Director of Navwealth Senior Business Services Accounting Bookkeeping Manager
Agenda Business Finance and Lending Options Government Assistance including Stimulus Packages and Grants Business Financial Management and Operations Q&A
General Advice Disclaimer This webinar has been prepared by Navwealth Accounting Pty Ltd and Navwealth Bookkeeping Resources Pty Ltd. Any advice provided is of a general nature and does not take into account personal circumstances. You should consider whether the information is appropriate to your needs, and where appropriate, seek further professional advice. Taxation, legal and other matters referred to in this webinar are of a general nature only and are based on Navwealth’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Busi Business ness Finance Finance and and Lending Lending Simon Prowse Director of Navwealth Accounting
Loans Loans and and Finance Finance Cutting the compliance (red tape) temporary exemption on responsible lending provisions allowing banks to provide credit to customers faster and easier Corporate Governance SME Guarantee Scheme 3 ‐ 6 Month Loan Holidays Credit Card Payment Holidays Access to discounted fixed rates Debtor and Asset Finance Government Loans and Grants
Corporate Governance AGM’s extension o Hybrid and virtual AGM’s o Time extensions 2 ‐ 3 months Bankruptcy Safety Net o From $5,000 to $20,000 for proceedings o Action period from 21 days to 6 months o Trading Insolvent – 6 month temporary relief More to come to protect business from bankruptcy
SME Guarantee Scheme $40 Billion set aside for new lending to SME’s – Major Banks Only 50% of the loan is guaranteed by the government Maximum Loan $250,000 3 Years Fixed Term with up to 6 months payment holiday Concessional Interest Rates
Personal Loan Holidays No payments on mortgage for a 3 to 6 month period (3 months will be reviewed) Interest accrues and is capitalized Normal Interest Rates apply rather than penalty rates Increased term of loan and or repayments after holiday Need to apply case by case basis – watch the traps If personally lend to your business – supplementary loan documents
Credit Card Payment Holidays Much the same as personal loan holidays Defer or pause option on repayments – Card frozen Transfers to a fixed style loan after the holiday period Concession Interest Rates – Supplier dependent Need to apply case by case basis – watch the traps
Access to Discounted Mortgage Rates Offered by the major banks Access to discounted rates Lock in for 1, 2 an 3 year terms for as little as 2.19% pa May require refinance which could be difficult Need to apply case by case basis
Debtor or Asset Finance Consider non ‐ conventional finance options Debtor or invoice finance/factoring o Support customers o Keep sales/services
Government Loans and Grants Bushfire Affected Communities and Business Grants/Loans o Small Business Affected $10,000 Grant o Small Business Recover Grant $50,000 o Concessional Loans • $50,000 working capital loan – 5years, 2 yrs Interest Free • $500,000 business recover loan – 10 yrs 2 yrs Interest Free ATO Payment Plans o Past or existing debt o Cut in red tape but case by case – good history
Gov Governmen rnment Assis Assistance ance Hugo Furzer Senior Business Services Manager
Fe Federa ral Gov Governmen rnment St Stimul ulus us Increase in Instant Asset Write ‐ Off Accelerated Depreciation Deductions Cash flow assistance for small business Apprentices and Trainees Tax Free Payments SME Super Guarantee Access to Super Coronavirus Supplement
Instant Asset Write off $150,000 The Government has increased the instant asset write off from $30,000 to $150,000 The threshold is on a per asset basis Turnover for threshold was previously $50 million but that has now been increased to $500 million Only up to 30 June 2020
Accelerated Depreciation Deductions 50% of the cost of an eligible asset as an immediate deduction with the remainder being depreciated under existing rules Business turnover must be below $500 million Must be new (can’t be second hand) Must be first used or installed by 30 June 2021
Cash Flow Support ‐ Apprentices and Trainees Employers can apply for wage subsidy of 50 per cent of apprentice’s or trainees wages paid during the 9 months from 1 January 2020 to 30 September 2020 Maximum support per employee is $21,000 for that 9 month period Eligibility o Small business must be employing less than 20 people o The apprentice or trainee must have been in training with a small business as at 1 March 2020 o If an employer of any size, takes on an apprentice or trainee who was in training as at 1 March 2020 but was subsequently terminated, they will also be eligible for the subsidy.
Cash Flow Support ‐ Tax Free Payments of up to $100,000 Eligible Registered charities Small businesses who were active employers established before 12 th March 2020 and have a turnover of under $50 million Initial Benefit Dependent on what PAYG withholding amounts are reported in activity statements between March and June The minimum benefit an employer can receive is $10,000 The maximum benefit an employer can receive is $50,000 Additional Benefit Only available to businesses that remain active The amount of benefit received is mirrors what you received with the initial benefit
So how are the benefits calculated and when are they paid? Depends on whether you report your PAYG Withholding on a quarterly or a monthly basis
Quarterly Lodger 100% credit for PAYG withholding amounts reported in March & June activity statements Capped at $50,000 across the two activity statements If PAYG withheld is less then $10,000 you will receive a credit for $10,000 Applies where wages are reported but no tax is withheld Additional benefit is paid in two equal instalments
Example #1 Activity Statement PAYGW Reported Credit Applied Date of Credit March $15,000 Initial Benefit ‐ $15,000 28 April Initial Benefit ‐ $12,000 28 July June $12,000 Additional Benefit ‐ $13,500 28 July September N/A Additional Benefit ‐ $13,500 28 October
Example #2 Activity Statement PAYGW Reported Credit Applied Date of Credit March $70,000 Initial Benefit ‐ $50,000 28 April Initial Benefit ‐ $0 28 July June $60,000 Additional Benefit ‐ $25,000 28 July September N/A Additional Benefit ‐ $25,000 28 October
Example #3 Activity Statement PAYGW Reported Credit Applied Date of Credit March $0 Initial Benefit ‐ $10,000 28 April Initial Benefit ‐ $0 28 July June $0 Additional Benefit ‐ $5,000 28 July September N/A Additional Benefit ‐ $5,000 28 October
Monthly Lodger 300% credit for the PAYG withholding amount reported in the monthly activity statement for March 100% credit for the PAYG withholding reported in the monthly activity statements for April, May and June. The $50,000 cap is across all 4 months The Additional Benefit, if eligible, is credited automatically in 4 equal instalments
Example: Activity Statement PAYGW Reported Credit Applied Date of Credit March $10,000 Initial Benefit ‐ $30,000 21 April April $8,000 Initial Benefit ‐ $8,000 21 May May $10,000 Initial Benefit ‐ $10,000 22 June Initial Benefit ‐ $2,000 21 July June $10,000 Additional Benefit ‐ $12,500 21 July July Additional Benefit ‐ $12,500 21 August August Additional Benefit ‐ $12,500 21 September September Additional Benefit ‐ $12,500 21 October
SME Super Guarantee – 9.5% Must be adhered to No relaxing of the super guarantee rules and timing for the payments
Access to Super Immediate need outweighs the long term Access up to $20k • $10K of Super before 30 June (from Mid April) • $10K post June (July to September) Withdrawals Tax Free and exempt from means tests Eligibility • Unemployed or recently redundant • Eligible to receive allowances • Working hours reduced >20% • Sole trader or self employed >20% reduction in turnover Application via ATO – Applies to SMSF
Coronavirus Supplement $550 per Fortnight for 6 months Existing and new recipients in eligible payment categories expanded to include • Permanent employees stood down • Casual Workers • Sole traders • Self Employed • Those caring for someone in isolation or contracted the COVID19 virus More details refers to Services Australia
Busi Business ness Financial Financial Ma Manage geme ment nt and and Oper Operations ns Hayley Kalms Director of Navwealth Bookkeeping
How good business and financial management can help you?
What’s the Impact on Your Business? Assess the direct impact on your Business: Sales, Staff, Suppliers, Cash Are you a non ‐ essential or essential business Are you a Sole Trader or an Employer not paying wages What is the estimated reduction in income, both in your business and or personally
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