Supporting you through Covid-19

As the COVID-19 scenario changes daily, the advice given to businesses is continually revised. During ths time, the health, safety, and financial wellbeing of our customers and staff is paramount. If your business is being impacted by the COVID-19 outbreak, please contact us on 1800 693 467 or assistance@finstro.com.au


As information comes to light, Finstro will share the latest facts from Government and other reputable sources.


Several industries have been particularly impacted by the virus, including tourism, hospitality education, health, and aged care. With no sure way to predict the number of people who will be impacted by the virus, many businesses are set to face issues related to supply chain, workforce and cash flow management.


As a specialist SME lender, we wanted to assure our customers that we are open for business and will continue to provide our flexible line of credit to you during this time of ongoing uncertainty.


Below is a summary of the two assistance packages that has been made available by the Federal Government and how to access these important measures to help you continue trading.

 

 

Package #1 – announced on 12 March 2020

Cash flow assistance for businesses

 

• Businesses with turnovers up to $50 million will be eligible for tax-free payments equal to 50 per cent of PAYG withheld from salaries and wages, with a minimum of $2,000 and a maximum of $25,000 over six months. Businesses that pay salaries and wages but are not required to withhold tax will also receive $2,000.

 

• The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

 

• $7000 each quarter in wage subsidies for employers of less than 20 people to save the jobs of 120,000 apprentices.  Subsidies will be backdated to 1 January 2020 and will run until 1 September 2020.

 

• The Australian Tax Office (ATO) will provide administrative relief for certain tax obligations (similar to relief provided following the bushfires) for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis.

 

• Please visit ATO.gov.au to see your options.

Delivering support for business investment

 

• $700m to expand the instant asset write off scheme – threshold increased from $30k to $150k. Turnover threshold increased from $50m to $500m.  The instant asset write-off scheme will operate from today until 1 July 2020 

 

• Introduction of a time-limited 15-month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions.

Staff subsidies

 

• $7000 each quarter in wage subsidies for employers of less than 20 people to save the jobs of 120,000 apprentices. Subsidies will be backdated to 1 January 2020 and will run until 1 September 2020.

 

• Waiting times for a government sickness allowance will be waived for casual workers forced into self-isolation.

Package #2 – announced on 22 March 2020

Boosting cash flow for employers – Package Two

 

An increase from the first package, small and medium business and not-for-profit (including charities) employers with aggregated annual turnovers of under $50m will be eligible for tax-free payments of up to $100,000 per employer.


The first payment (capped at $50,000) will be made after 28th April and the second payment (also capped at $50,000) after 28 July 2020. This is the single largest measure in this package and represents approximately $31.9b.


SMEs with aggregated annual turnovers of under $50m employers will now receive two payments equal to 100 per cent of their PAYG withheld on salary and wages with each maximum payment increased from $25,000 under the first package) to $50,000, for a total maximum payment of $100,000.


Eligible businesses that pay salary and wages but are not required to withhold tax will receive a minimum payment of $20,000, up from $2000 in the first package. The payment will be available from 28 April 2020 and, will be paid as a credit to the business upon lodgement of their activity statements.


The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.

Coronavirus SME Guarantee Scheme

 

The Government commits to underwrite $20b worth of loans as a 50 per cent guarantee to support lending of up to $40 billion to SMEs from bank and non-bank lenders.


Starting in early April, this will apply to eligible loans for businesses with annual turnovers of up to $50 million and will include an upfront six-month freeze on repayments.


The loans will be unsecured but used only for working capital purposes and will apply to loans granted within six months from April 1, 2020. New and existing bank customers will be able to apply for loans up to $250,000 over three years.

Providing temporary relief for financially distressed businesses

 

Temporary increase to the threshold at which a creditor can take action to initiate insolvency or bankruptcy from $2000 to $20,000 and giving companies and individuals six months instead of 21 days to respond.


Relief for directors for personal liability when the company is trading while insolvent.


The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the coronavirus.


This relief will be provided over the next six months.


ASIC has also released guidance on AGMs and reporting for listed entities.

Please contact us on 1800 693 467 or assistance@finstro.com.au if you have any queries or questions.