The business community has faced extraordinary challenges through the first half of calendar year 2020 which unfolded at a pace that left many struggling to keep up the press conference announcements let alone address impacts and solutions. We’re providing this review of key economic and finance issues of the past 6 months to put the situation in perspective and to catch up on opportunities you may have missed.
Bushfires, extreme rain events and COVID-19 rolled out one after the other and while the rain was a drought-reliever for the agricultural community, there was very little else for business to celebrate with these unexpected events.
By the middle of the year, we would usually have the policies of the Federal Budget to analyse and incorporate into our business planning. But as the Budget has been postponed until October, we’re confining our review to what is already on the table.
The reality is that the economy is in recession and unemployment rose as expected over March, April and May as a result of business closures due to coronavirus. However, on the upside, interest rates remain low, consumer confidence rose in June following several months of low levels and both the federal and state governments continue to roll out new programs to assist business through the recovery phase.
Government Support for Business
- The Morrison Government announced billions of dollars in support to individuals and business throughout the coronavirus pandemic with the JobKeeper and JobSeeker along with cash payments to SMEs key initiatives. Some of these initiatives are due to expire on 30 September and businesses are waiting for an announcement, expected late July, on how JobKeeper in particular will look moving forward, if it continues at all.
- Instant Asset Write Off (IAWO) was another key element and the original deadline for this scheme has already been extended from 30 June to 31 December. So eligible businesses still have time to acquire assets and take advantage of the tax deductions in 2020/21. If you missed the detail on IAWO, check our articles as we posted a number which cover it or call us 1300 000 003 and discuss finance for your proposed asset purchases with our consultants.
- State governments rolled out various targeted measures with most including relief for payroll tax and other fees and charges. Additional state grants keep appearing, so check with your state treasury or industry department for what’s on offer.
- Infrastructure, building and construction and boosting Australian manufacturing are flagged as drivers for economic recovery. If you operate in these sectors and would like finance to purchase equipment to be prepared to capture opportunities as they emerge, contact Jade Finance.
Economic Outlook
Against the backdrop of such an unprecedented year and unpredictable events, it’s challenging to even ponder let alone forecast what’s ahead. The markets are continuing the volatility they have shown all year, reacting to both domestic and international conditions and there are both potentially good indicators for some sectors and challenges for others.
We’ve compiled a few points of note in relation to our sphere of interest:
- The Reserve Bank’s quantitative easing measures implemented in response to the economic impacts of COVID-19 are designed to allow lenders easier access to cheaper funds to stimulate investment.
- While lenders initially tightened lending restrictions early in the crisis, we are now seeing an easing and good finance deals are available for the purchase of cars, boats, equipment, motorbikes, trucks, caravans and other business assets.
- Interest rates are not expected to drop further but expected to be kept low for some time.
- As businesses reopen and restrictions are eased, consumer confidence is showing a rise.
- The risk of a second wave of coronavirus is a very real threat and may result in at least targeted restrictions being implemented. Businesses need to stay alert and agile to quickly pivot to an operational status to meet these restrictions.
- The costs of creating a COVID-safe workplace have been a significant impost to many businesses. Some of these requirements may be in place for some time. Contact us if you require finance to cover investment in further measures to meet the requirements.
- Recent urgent alerts around the risk of cyberattacks is a wake-up call to all businesses to address their IT systems. Many businesses run complete computer-controlled operations and a denial of service or ransomware attacks can bring the business to a standstill. If you require finance to upgrade your systems, contact us for a quote.
Jade Support for Business
Prior to, throughout and after the peak of the coronavirus crisis we’ve continued to provide our services to our business and personal customers. We did encounter issues for some customers when lenders tightened their guidelines, but the situation has eased.
With 2020 presenting a lot of financial challenges that many businesses have never had to previously consider, we remind you that our services extend to a wide range of business financial requirements:
- Chattel Mortgage, Leasing, CHP, Novated Car Leasing and Rent to Own for Motor Vehicle
- Marine Vessel Finance
- Debtor Invoicing Finance
- Non-Bank Lender Overdraft
- Insurance Premium Funding
- Business Loans – secured and unsecured
We hope this update has provided you with information to move forward with your business purchases and investment plans and we welcome your call for a confidential discussion on how Jade Finance can assist with great finance.
For cost-effective business finance contact Jade Finance Call 1300 000 008
DISCLAIMER:THIS INFORMATION HAS BEEN PROVIDE AS GENERAL MATERIAL FOR YOUR CONSIDERATION. INFORMATION IN REGARD TO GOVERNMENT POLICIES IS SOURCED FROM OFFICIAL AUSTRALIAN GOVERNMENT SOURCES. NO LIABILITY IS ACCEPTED FOR ERRORS IN PRESENTATION OR IN THE INTERPRETATION OF FACTS OR THE COMMENTARY AND ANALYSIS OF INFORMATION WHICH IS AVAILABLE IN THE PUBLIC DOMAIN. INDIVIDUALS ARE ADVISED TO CONSULT WITH THEIR FINANCIAL ADVISOR OR ACCOUNTANT FOR SPECIFIC ADVICE REGARDING THEIR INDIVIDUAL SITUATION.
