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Heads-Up: Deadlines looming for COVID-19 Support Changes

Since March-April 2020, many individuals and businesses have been receiving, and in many cases surviving on, coronavirus support and incentives provided through both Federal and state and territory Governments. Whether it was wishful thinking that the pandemic would be over in a relatively short time or conservative policy-making, but timeframes, some as short as 6 months, were placed on many of these supports.

At the time the policies were announced, 6 months seemed a very long time – remember? Having never experienced a global pandemic, most of us at least thought WHAT??? Six months seemed like an eternity. But as the weeks and months and second waves and new outbreaks have rolled on, it now appears 6 months is not nearly long enough in terms of support.

The Federal Government has tweaked the detail to some measures but deadlines are still approaching for changes and in some cases, expiration of key measures. Businesses and individuals should be taking note and making the necessary tweaks to their own individual finances.

JobKeeper Changes

JobKeeper has been the flagship of the Federal Government coronavirus response with millions of individuals and hundreds of thousands of businesses benefiting from the scheme. But the first deadline for this to expire was 28 September 2020. That ‘expiration date’ has been tweaked into a ‘change date’ and those affected should be paying attention. Businesses that want to continue to receive the wage subsidy will need to reapply and again at the end of 2020 and meet the revised criteria.

The wage subsidy is being reduced and a different amount applicable to part time and full time workers. If this reduction will be a significant impost on your cash flow moving forward, you may wish to review your current finance and loans. If you would like to consider your refinance options, speak with one of our Jade Finance consultants about how we may be able to restructure your existing loans into a more workable package.

Instant Asset Write-Off Ends 31 December 2020

Since being introduced in March the IAWO has been widely promoted by many motor vehicle and equipment suppliers as an incentive to attract buyers. But for businesses that have still not got around to those all-important asset acquisitions which will allow them to realise the benefits of IAWO – NOW is the time to move.

The original deadline was extended to 31 December but that is the date that the assets must be acquired and operational in the business in order to be eligible for IAWO. Check the ATO website to ensure the cars, trucks or equipment that you have in mind are eligible assets under the scheme.

In brief:

  • Businesses with turnover aggregated under $500m are eligible
  • Threshold for assets is max $150,000
  • Assets may be cars, business vehicles, trucks, equipment subject to specific criteria.

Jade Finance can act quickly to assist you with a quote on a Chattel Mortgage for the purchase. You will need to use this type of finance for your acquisition as the asset will need to be entered on your balance sheet to enable your business to realise the asset write-off.

Your Jade consultant can arrange pre-approved finance so you are well-organised ahead of speaking with the supplier. And by handling the loan sourcing, lender negotiations and the paperwork, we can save you a lot of time and expedite the finance side of your acquisition to meet the IAWO deadline.

When looking at these deadlines, don’t forget to take into account the possibility of delivery delays for certain vehicles, trucks or equipment as a result of COVID-19. Both in overseas and local markets, manufacturing and other processes have been disrupted due to coronavirus. These may result in shortages or delayed delivery. To ensure you meet 31 December 2020 deadline, it may be a good idea to get onto this right now.

Business Backed Investment Deadline

The BBI has a longer timeframe with the eligibility criteria being that the assets must be purchased and operational after 12 March and in place by 30 June 2021. Those months can tick away especially with allowing for Christmas-NY breaks here in Australia and then the shutdowns for Lunar New Year in many Asian manufacturing hubs in early 2021.

You can check criteria for this scheme at https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Backing-business-investment—accelerated-depreciation/ and speak with a Jade Finance consultant at any time about locking in your finance deal.

General Outlook

  • The August job figures surprised most pundits and the Treasurer himself with the drop in unemployment from 7.5% to 6.8%. But most are taking a cautious approach as the full effect of Victorian August-September lockdown is still to be felt.
  • The US Federal Reserve has made a statement saying they intend to keep interest rates at near zero until inflation rises to give the economy a chance to recover. This could be well into 2023. How this will affect the official interest rate in Australia will have to play out. But suffice to say, it is looking like low interest rates will be with us for some time.

To take advantage of the current low interest rates to make that special personal purchase or business asset acquisition, there is no deadline on our Jade Finance cheap loan deals!

To discuss your finance requirements please call Jade Finance. Call 1300 000 003

DISCLAIMER: ALL INFORMATION WHICH IS PRESENTED IN THIS ARTICLE IS INTENDED SOLELY FOR THE PURPOSE OF PROVIDING GENERAL INFORMATION. IT IS NOT UNDER ANY CIRCUMSTANCES INTENDED AS PROVIDING FINANCIAL ADVICE. FOR SPECIFIC FINANCIAL ADVICE ON INDIVIDUAL FINANCIAL CIRCUMSTANCES, READERS ARE ADVISED TO CONSULT WITH A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR INCORRECT OR OUT OF DATE DETAILS IN REGARD TO GOODS, SERVICES, POLICIES AND PROGRAMS MENTIONED IN THE ARTICLE. THE INFORMATION AND DATA QUOTED HAS BEEN SOURCED FROM PUBLICLY AVAILABLE SOURCES INCLUDING MANUFACTURER AND GOVERNMENT WEBSITES.

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