The COVID-19 coronavirus pandemic is having unprecedented effects on small business finances causing stress to many business owners.
How aware are you of the different Covid recovery grants, programs and loans that you may be eligible for?
With Job Keeper now finished, many businesses may be feeling the pressure and be on the brink of closure.
In response to this, State and Federal Governments have announced a raft of new economic recovery packages that your business may be eligible for. If you think you may be eligible or if you need support to find out, the team at Entire Bookkeepers is just a phone call or email away.
Below is a summary of some of the current support packages that are available as of 29th April 2021.
On 11 March 2021, the Federal Government announced the SME Recovery Loan Scheme, which will come into effect on 1st April 2021 and operate until 31st December 2021..ARE YOU ELIGIBLE?
- The Government guarantee will be 80% of the loan amount.
- Lenders are allowed to offer borrowers a repayment holiday of up to 24 months.
- Loans can be used for a broad range of business purposes, including to support investment. Loans may be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme.
- Borrowers can access up to $5 million in total, in addition to the Phase 1 and Phase 2 loan limits.
- Loans are for terms of up to 10 years, with an optional repayment holiday period.
Loans can be either unsecured or secured (excluding residential property).
- The interest rate on loans will be determined by lenders but will be capped at around 7.5%, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time.
Loans issued under the Scheme can be used to refinance existing loans or for a broad range of businesses purposes (including to support investment) but cannot be used to:
purchase residential property;
purchase financial products;
lend to an associated entity; or
lease, rent, hire or hire purchase existing assets that are more than halfway into their effective life.
Program – Round 2 Regional QLD Only
- have been subject to closure or otherwise highly impacted by the shutdown restrictions announced by Queensland’s Chief Health Officer on and since 23 March 2020;
- demonstrate that business revenue has experienced a significant decline since 23 March 2020 over a minimum one-month period due to the onset and management of COVID 19;
- employ staff and have fewer than 20 employees at the time of applying for the grant (these employees should be in addition to the business owners and be employed on the
- have a valid Australian Business Number (ABN) active as of 23 March 2020;
- be registered for GST;
- have a Queensland headquarters;
- have an annual turnover over $75,000 for the 2018-19 or 2019-20 financial year or provide financial records that indicate that this will be met for recently started small businesses;
- have a payroll of less than $1.3 million; and
- not be insolvent or have owners/directors that are undischarged bankrupt.
Regional Queensland is any area of Queensland that is not:
- Gold Coast
- Lockyer Valley
- Moreton Bay
- Scenic Rim
- Sunshine Coast
The threshold amount for each asset is now $150,000 (up from $30,000) and eligibility extends to businesses with an aggregated turnover of less than $500 million (up from $50 million).
From the 6th October 2020 until 30th June 2022, temporary full expensing allows a deduction for:
- the business portion of the cost of new eligible depreciating assets for businesses with an aggregated turnover under $5 billion or for corporate tax entities that satisfy the alternative test
- the business portion of the cost of eligible second-hand assets for businesses with an aggregated turnover under $50 million
- the balance of a small business pool at the end of each income year in this period for businesses with an aggregated turnover under $10 million.
- Business Basics grants of up to $5,000 each will support new and emerging businesses to increase core capabilities and adopt current best practice. Applications will open on May 31, 2021.
- Business Boost grants of up to $15,000 will help small businesses to improve their efficiency and productivity through organisational development and upgrades through automated software and CRM systems. Grants can be used for website development and upgrades, strategic marketing, training and coaching, advisory services and planning for business continuity and succession. Applications will open late July 2021.
- Business Growth Fund grants of up to $50,000 will allow businesses to buy highly specialised equipment to seize and accelerate growth opportunities. Applications will open May 11, 2021, with Guidelines available from 1 May.