A Business Survival Plan for COVID 19 Presenter Craig Banning Simon - - PowerPoint PPT Presentation

A Business Survival Plan for COVID 19

Presenter

Craig Banning

CEO

Simon Prowse

Director of Navwealth Accounting

Hayley Kalms

Director of Navwealth Bookkeeping

Hugo Furzer

Senior Business Services 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
• Hybrid and virtual AGM’s
• Time extensions 2‐3 months
• Bankruptcy Safety Net
• From $5,000 to $20,000 for proceedings
• Action period from 21 days to 6 months
• 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
• Support customers
• Keep sales/services

Government Loans and Grants

• Bushfire Affected Communities and Business Grants/Loans
• Small Business Affected $10,000 Grant
• Small Business Recover Grant $50,000
• 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
• Past or existing debt
• 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
• Small business must be employing less than 20 people
• The apprentice or trainee must have been in training with a small business as at 1 March

2020

• 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 12th 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

Activity Statement PAYGW Reported Credit Applied Date of Credit March $15,000 Initial Benefit ‐ $15,000 28 April June $12,000 Initial Benefit ‐ $12,000 Additional Benefit ‐ $13,500 28 July 28 July September N/A Additional Benefit ‐ $13,500 28 October

Example #1

Activity Statement PAYGW Reported Credit Applied Date of Credit March $70,000 Initial Benefit ‐ $50,000 28 April June $60,000 Initial Benefit ‐ $0 Additional Benefit ‐ $25,000 28 July 28 July September N/A Additional Benefit ‐ $25,000 28 October

Example #2

Activity Statement PAYGW Reported Credit Applied Date of Credit March $0 Initial Benefit ‐ $10,000 28 April June $0 Initial Benefit ‐ $0 Additional Benefit ‐ $5,000 28 July 28 July September N/A Additional Benefit ‐ $5,000 28 October

Example #3

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 June $10,000 Initial Benefit ‐ $2,000 Additional Benefit ‐ $12,500 21 July 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

Are your Financials Up to date?

• Bring them up to date & keep them up to date
• Do you have the tools to do this i.e. a software package like Xero
• How will this help?

Assess you Cash?

• What Cash Reserves do I have?
• Talk to Debtors, Customers or Clients
• Do we have any assets we can sell?
• Access to government incentives
• Access to Loans & other financial assistance
• What is your current & future cash position?

Where Can I Save, What Can I do?

• Review all your expenses, where can I reduce my expenses?
• Contact creditors & suppliers & discuss terms
• Review: Direct Debits, Rent, Utilities, Telephone/Internet, Insurance, School

Fees, Loan terms

Strategies/Innovative Thinking

• Don’t just give up, look for opportunities, stay open till you told to stop
• Get Creative: Can I sell online? Can I do home deliveries?
• Opportunity to Reflect: Are we happy with our business, are you achieving

your goals, was there adequate cashflow, what direction do we want to take?

• How can we afford to run our business until this is over

Staff

• Most asked question during crisis is “Do we keep staff”? “How do we afford to

keep our staff”?

• How can you make the most of your staff? Who can work from home? What

skills do my staff hold & how can I utilise that?

• Keeping staff & make the most out of government incentives
• Can my staff take a pay cut or take leave?
• Can’t retain staff make sure you talk to Fair Work Australia

Act Now!! Be Proactive not Reactive.

Conclusions Conclusions

Take action

• Understand what you can do
• Be proactive
• Seek help
• We are here to help – Dedicated information page for COVID 19 Page our

Website

• Useful tools, checklists and Guides
• Taping this Session
• Published Paper
• Navwealth Lending Specialist Jesse Canon

Craig Banning CEO Simon Prowse Director of Navwealth Accounting Hayley Kalms Director of Navwealth Bookkeeping Hugo Furzer Senior Business Services Manager

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