Despite Australia’s remarkable economic bounce back and recovery from major impacts of the coronavirus pandemic, outbreaks continue to occur with potential ramifications for many individuals and businesses. An extended lockdown in both Greater Sydney and Victoria concurrently, have reportedly up to 12 million individuals under stay at home orders. But the biggest shock of the current situation was not the decision by NSW Premier Gladys Berejiklian to order the lockdown but the subsequent 14 day pause on the construction sector.
Construction has been a major driver and in many ways the saviour of the national economy throughout the pandemic crisis. Both state and territory and federal governments have been constantly allocated more and more funds to infrastructure projects to stimulate the economy into recovery. The Federal Government also introduced the Home Builder Grants as part of its Economic Recovery Plan. Many homeowners have taken advantage of this program to instigate new home construction or major renovations. In NSW, many now face 2 weeks without any progress on the project and mounting costs for both the project owners as well as for main contractors and builders, individual tradespeople, suppliers and associated businesses.
As lenders across many sectors, we know that many of our customers will be facing concerns around meeting the loan repayments and we offer a range of information to source assistance and options from across our finance portfolio.
Business Financial Support
The NSW State Government, in conjunction with the Commonwealth, is offering grants and other payments to support businesses in the extended lockdown. There are several packages available and individual business operators will need to check the criteria for each package at Service NSW to see which may best suit their requirements.
These relief measures are based primarily on a 30% cut in turnover in 2021 26 June through 26 July period compared with that period on 2019. 2020 has been overlooked as many were receiving JobKeeper and other complications associated with that COVID-ridden year.
In reviewing the criteria to be eligible for support, a few points are noted:-
- A business may have increased its prices/fees over that 2 year period. While the business activity may be showing a decline due to the lockdown, the actual figures may not reflect the required 30%.
- Many operators in the construction sector work on a progress payment schedule which may impact the outcome of comparing turnover in the indicated periods. It may depend on when a business received a payment in 2019 and when they receive June-July 2021 payments if that 30% downturn is achieved.
- The period as currently indicated (acknowledging it may be revisited) does not take in the full 14 days of the construction sector lockdown.
- While a business may have money coming in during the eligibility period, it may be from earlier work and the impact of the lockdown for them may actually be felt later in the year.
Some of these issues may be addressed by the government and the packages reconfigured – a wait and see scenario.
For those businesses that are experiencing financial issues but may not qualify for or choose to apply for the government support packages, Jade Finance may be in a position to assist with a range of finance options:-
- Business Overdraft: we have access to non-bank lenders that provide business overdrafts in a similar way to bank overdrafts. This facility can be set up swiftly by our consultants and may be an ideal solution to overcome short term cash flow issues.
- Secured and Unsecured Business Loans: A longer-term solution could be speaking with us about a business loan on a secured or unsecured basis. These general-purpose loans can be utilised to cover a wide range of business expenses and we tailor packages at cheap interest rates to suit individual business requirements.
- Refinancing Current Finance Commitments: If you take the view of some epidemiologists that the lockdown should be in place ‘for some time’ and you may need a longer-term solution to get through, let’s talk refinancing. Many businesses have taken advantage of temporary full expensing and IAWO to invest in new assets and equipment over the past 18 months. This means they are committed to meeting monthly loan repayments. If those repayments are cause for concern at this time, refinancing to achieve a lower repayment may be worth considering. We provide refinancing across all loan types and categories.
All finance is individually sourced and customised to meet the needs of our customers. Refer to our Business Finance Interest Rate Tool to see the different low rates across the lending selection.
Applications and Pre-Approved Loans: Pausing or Proceeding
If you currently have a business finance deal in progress with Jade Finance, we will be continuing with the normal procedures unless otherwise advised. Our lenders and ourselves are still sourcing quotes and process finance applications. If you require a pause, contact your Jade consultant.
Pre-approved loans are in place for the time period as indicated when issued. If you require additional time because of issues around lockdown, contact your Jade consultant to discuss your requirements.
Whatever your business requires in regards to finance at this time, please feel free to contact us to discuss how we may be able to assist you.
Contact 1300 000 008 for a no obligation discussion around your lending requirements
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.