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A Business Survival Plan for COVID 19
A Business Survival Plan for COVID 19
Presenter
Craig BanningCEO
Simon ProwseDirector of Navwealth
Accounting
Hayley KalmsDirector of Navwealth
Bookkeeping
Hugo FurzerSenior Business Services
Manager
Agenda
Business Finance and Lending OptionsGovernment Assistance including Stimulus Packages and GrantsBusiness Financial Management and OperationsQ&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’sinterpretation 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.
Business Finance and LendingSimon Prowse
Director of Navwealth Accounting
Loans and 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 Scheme3‐6 Month Loan HolidaysCredit Card Payment HolidaysAccess to discounted fixed ratesDebtor and Asset FinanceGovernment Loans and Grants
Corporate Governance
AGM’s extensiono Hybrid and virtual AGM’so Time extensions 2‐3 months
Bankruptcy Safety Neto From $5,000 to $20,000 for proceedingso Action period from 21 days to 6 months o 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
o Support customers o Keep sales/services
Government Loans and Grants
Bushfire Affected Communities and Business Grants/Loanso Small Business Affected $10,000 Grant o Small Business Recover Grant $50,000o 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 Planso Past or existing debto Cut in red tape but case by case – good history
Government AssistanceHugo Furzer
Senior Business Services Manager
Federal Government Stimulus
Increase in Instant Asset Write‐OffAccelerated Depreciation DeductionsCash flow assistance for small business Apprentices and Trainees Tax Free PaymentsSME Super GuaranteeAccess to SuperCoronavirus 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
o Small business must be employing less than 20 people o The apprentice or trainee must have been in training with a small business as at 1 March 2020
o 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 $12,000Initial Benefit ‐ $12,000
Additional Benefit ‐ $13,50028 July28 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 $60,000Initial Benefit ‐ $0
Additional Benefit ‐ $25,00028 July28 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 $0Initial Benefit ‐ $0
Additional Benefit ‐ $5,00028 July28 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 MayMay $10,000 Initial Benefit ‐ $10,000 22 June
June $10,000Initial Benefit ‐ $2,000
Additional Benefit ‐ $12,50021 July21 July
July Additional Benefit ‐ $12,500 21 AugustAugust 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
Business Financial Management and Operations
Hayley KalmsDirector 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
Take action Understand what you can do Be proactive Seek help We are here to help – Dedicated information page for COVID 19 Page our Websiteo Useful tools, checklists and Guides o Taping this Sessiono Published Paper
Navwealth Lending Specialist Jesse Canon
Craig BanningCEO
Simon ProwseDirector of Navwealth
Accounting
Hayley KalmsDirector of Navwealth
Bookkeeping
Hugo FurzerSenior Business Services
Manager
AQ
