Federal Budget: Small Business Perspective
Big Picture: What you need to know
The large numbers may seem irrelevant to your small business but they actually do have significance to your commercial finance, as we explain. The Federal Budget is aimed at targeting jobs and growth which are the key economic indicators – unemployment figures and inflation – which the Reserve Bank of Australia is watching in regard to increasing interest rates. The Budget expectation is that unemployment will fall to 5% around the middle of 2022 and by mid-2023 to 4.75%. Read more here. In regard to purchasing business equipment, one of the big-budget wins for business is the extension of the temporary full expensing through another year to 30 June 2023. This is an accelerated asset depreciation measure like Instant Asset Write-off which most business owners have become familiar with over the past year. Small businesses can take advantage of this asset investment measure to purchase cars and other vehicles to be used in the business as well as for a wide range of business equipment. Subject to ATO criteria. In order to be in a position to depreciate an asset, it must be acquired with the appropriate finance vehicle, which is Business Chattel Mortgage. While not all lenders welcome finance applications from small businesses, we have lenders that do. We are well-positioned to assist even the smallest business with a wide range of loan products for a wide range of purposes. To encourage businesses to take on workers, the Budget includes extensions of several wage subsidy schemes including for apprentices and trainees which may greatly assist small businesses to grow their operation. If additional support is required to assist cash flow for growth, small businesses can consider our Small Business Overdraft and Small Business Secured and Unsecured Business Loans as possible solutions.Small Business in the Frame: what’s in it for you
SMEs, sole traders, freelancers and those looking to set-up their own business will be encouraged to see special mentions of small business in the budget, including a mention of microbusinesses. Small Business tax cuts: From 1 July 2021 the tax rate for SMEs will be cut to 25% which is done from the 30% it was in 2014/15. Encouraging self-employment: For those looking to set up their own business, the Budget includes a range of funding measure to assist. These cover New Enterprise Incentive Scheme, workshops around being your own boss, formal business training, business health checks, planning as well as entrepreneurship facilitators. While these are great supports, many new business operators will require some form of financing either during set-up or in the early stages of establishing a new small business. But one of the biggest drawbacks to accessing cheap small business loans is not having the financial documents which traditionally form part of the business loan application. Business Finance provides low doc business finance and no doc small business loans to assist. These loans are available for the purchase of business equipment and other purposes and can be achieved at very affordable interest rates. Small distillers and brewers receive a targeted benefit in regard to a reduction in excise tax. If this is signal for you to expand your operation with new equipment, speak with us about small business equipment loans. Creative, arts, cultural sector support: The creative sector abounds with small-scale businesses including ABN holders, freelancers and other small operators. The Budget includes seed funding grants to a festivals, events and new stage and screen productions. While the grants may go primarily to the producers and organisers, many of the small operators ‘behind the scenes’ may be seeking finance to upgrade their equipment for their role in the productions. Small business loans are available for lighting, camera, sound, props, editing and other equipment. Contact us to discuss the options available. Digital technologies uptake: Special mention of small business is made in the Federal Budget in regard to the adoption of digital technologies, especially in regard to e-invoicing. This support is via the Australian Small Business Advisory Service. To facilitate the acquisition and implementation of new technologies, Business Finance provides loans to small businesses for software, hardware, IT systems and other technology.Household Income Gains
With many small business owners, the household budget and the business income are very much entwined. So many will be pleased to know that the LMITO has been extended for another year and support by way of child care and programs to increase participation of women in the workforce.Working the Federal Budget into your business budget
Many of the measures announced in the Federal Budget, both in spending and tax relief, require thought and action to be implemented into a small business. Many also require finance. Business Finance provides the full range of commercial finance facilities to assist small businesses with a range of purposes. In particular with the acquisition of new equipment and with cash flow support. To get a better idea of your lending repayments, visit our online business loan calculator. The Federal Budget has to pass both houses of the federal parliament before the measures can be realised. But you can be ready to implement the initiatives by arranging your finance requirements as soon as possible. Contact 1300 000 033 to discuss our small lending options DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS.Related blog articles
Business Finance and the Federal Budget
Despite the significant coronavirus stimulus packages announced throughout 2020 and many of the measures delivered...
Read MoreFederal Budget – Business Prospects and Options
The Federal Budget delivers little in direct relief for business costs and energy price increases...
Read More