This is the beginning of a series of articles to update you on the relief packages available to various members of the public as a result of the COVID-19 pandemic. Given the frequency of the changes, we will provide regular updates and summarise Australia’s stimulus packages that are available to individuals and small businesses.
It’s important to take the time to review the information, particularly if your income has been affected. If you have questions or would like to discuss your options, contact our team.
Relief Packages for SME’s
Coronavirus Small and Medium Enterprises (SMEs) guarantee scheme
- Government will provide a guarantee of 50% to SME lenders for new unsecured loans to be used for working capital (This will enhance these lender’s willingness and ability to provide credit).
- SME’s (small and medium enterprises) with a turnover of up to $50 million will be eligible.
- Government will provide eligible lenders with a guarantee for loans with the following terms:
- Maximum total size of loans of $250,000 per borrower
- Loans will be up to three years, with an initial six-month repayment holiday
- Loans will be unsecured
- SMEs will only incur interest on the amount they draw down.
- This will commence by early April 2020 and be available until 30 September 2020.
- The Government is providing an exemption from responsible lending obligations for six months.
- The RBA has made the following interest rates:
- 4th March 2020 – .25
- 20th March 2020 – .25
Cash flow assistance for businesses
- The Government is providing up to $100,000 to eligible small and medium sized businesses (with aggregated annual turnover under $50 million), and not-for-profits that employ people, with a minimum payment of $20,000.
- Eligible employers that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100% of the amount withheld up to a maximum of $100,000 over two payments. This will be in the form of an automatic credit in the activity statement system upon lodgement of activity statements.
- This will be in the form of an automatic credit in the activity statement system upon lodgement of activity statements.
- Eligible employers that pay salary and wages will receive a minimum payment of $20,000 over two payments, even if they are not required to withhold tax.
The payments will only be available to active eligible employers established prior to 12 March 2020.
Wage Subsidy package for businesses: JobKeeper
The Federal Government announced last week additional support for businesses and their employees who are experiencing financial hardship due to the impact of the COVID-19 situation.
This latest package, worth $130 Billion, will be available to businesses who experience 30% reduction in turnover as a result of COVID-19 and will entitle businesses to apply for a payment of $1,500 per fortnight for each full time, part-time and casual employee on their payroll.
Effective immediately, employers and sole traders will be able to apply to the Australian Taxation Office (ATO) for wage assistance for workers on their payroll on 1 March 2020. The payments will commence in the first week of May and will be backdated from 30 March 2020. The support will be available to full-time and part-time workers, sole traders and casual workers who have been on their payroll for at least 12 months.
As more details emerge, we will continue to update this summary to keep you informed as to what is available to small and medium enterprises as well as individuals during this time.
It is important for everyone to consider what is available from the government to ensure businesses are able to survive now and thrive later.
If you, your family or friends require any assistance in relation to financial assistance, our team members are available and happy to discuss on a no obligation basis. Contact our team here or call us on 1300 763 486 for advice and support.
Updated 1 April 2020