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Business Finance Guide Updated | Fewer Businesses Need JobKeeper | Twelve Grains Capital

Govt takes action on two business finance policies



The government has expanded access to a favourable business accounting measure, while taking another step towards implementing an important business lending reform. The 'full expensing' legislation, which was introduced in the October budget, and which expires on 30 June 2022, will now apply to more businesses. Full expensing gives businesses with a turnover under $5 billion the right to deduct the full cost of eligible depreciable assets of any value in the year they are first used or installed. Under the new amendment, if businesses have a turnover above $5 billion, but they’ve invested more than $100 million in tangible depreciating assets in the period 2016‑17 to 2018‑19, they will qualify for the measure. Meanwhile, the government has introduced legislation to parliament to remove the ‘responsible lending obligations’ that currently apply to lenders. The government wants to give lenders more flexibility in the way they assess loan applications. As a result, lenders will be more likely to approve business loan applications, and will process those applications faster. These new credit rules will start on 1 March 2021, if approved by parliament. Get in touch if you need a business loan


Expert guide explains when and how to secure finance



Australia's small business ombudsman has released a new version of its Business Funding Guide, which has been updated in light of COVID. The Business Funding Guide explains the six situations in which small businesses need finance:

  • Expanding

  • Turning away customers

  • Running out of funding

  • Struggling to meet commitments

  • Struggling to collect debts

  • Dipping into personal funds

It also explains the four steps small businesses must take to secure finance:

  • Get your business accounts in order

  • Write or review your business plan

  • Do a finance fitness check

  • Decide whether to get a loan, seek investors or self-fund

“The guide was originally intended to help small businesses secure funding for growth, however given the heavy toll the COVID crisis has taken on small businesses, the focus is now firmly on their survival,” according to the ombudsman, Kate Carnell. “While many small businesses are still eligible for government support, these measures are temporary and plans will need to be made to fund their recovery, reinvention and growth.” Need finance? I can help


JobKeeper numbers show recovery “well underway”


With Australia’s economy now officially out of recession, the number of businesses that need JobKeeper has significantly improved compared to earlier forecasts. In the October budget, the government forecast that 2.2 million employees would be eligible for JobKeeper in the December quarter. However, the latest estimates suggest only 1.5 million workers will need to be supported. Treasurer Josh Frydenberg said this is "further evidence that Australia’s recovery from this once-in-a-century pandemic is well underway". The first phase of JobKeeper, which started on 30 March 2020, supported about 3.6 million workers. The second phase started on 28 September 2020 and will last until 28 March 2021. Under the second phase:

  • Fewer employees are covered

  • Payments have been reduced from $1,500 per fortnight to $1,200 for Tier 1 and $750 for Tier 2 employees

  • Payments will be further reduced on 4 January 2021, to $1,000 / $650


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